Question: Like most businesses, when Eagle Company renders services to another business, it is typical that the service is rendered on account, rather than as a

Like most businesses, when Eagle Company renders services to another business, it is typical that the service is rendered "on account," rather than as a cash transaction. As a result, Eagle Company has an account receivable for the service provided. Likewise, the company receiving the service has an account payable for the amount owed for services received. At a later date, Eagle Company will receive cash from the customer to satisfy the accounts receivable balance. However, when individuals conduct transactions with each other, it is common for the transaction to be for cash. For example, when you buy a pizza, you often pay with cash.
Why is it unusual for businesses such as Eagle Company to engage in cash transactions, while for individuals it is more common?

Step by Step Solution

★★★★★

3.46 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

One of the major reasons businesses have transactions on account is to control the disbursement and ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

142-B-A-G-F-A (880).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

A certain company is planning to run a project whose activities are summarized in the table below. \ table [ [ , , , ] , [ Task ID , Description, \ table [ [ Immediate ] , [ Predecessor ] ] , \ table...

Like most businesses, when Manor Company renders services to another business, it is typical that the service is rendered on account, rather than as a cash transaction. As a result, Manor Company has...

Like most businesses, when Falcon Company renders services to another business, it is typical that the service is rendered "on account," rather than as a cash transaction. As a result, Falcon Company...

Beowulf is more focused as hero rather than as a king." Do you agree with the statement. Give reasons for your answer.

=+SA 5-2 Manual vs. computerized accounting systems Like most businesses, when Manor Company renders services to another business, it is typical that the service is rendered on account, rather than...

Unit 2: Designing the Operations Designing the operations of an organization or your department - precedes operational management. For .ll _ . example, suppose a wallet manufacture's mission is to '...

(1)The Statement of Cash Flows Referencing this week?s readings and lecture, describe the following terms as they relate to the statement of cash flows: cash, operating activities, investing...

please read this case study and give your precious opinion on this case study thoroughly. regards Case Study Infosys is an IT and management consulting services provider. The firm has offices and...

kindly read this case study thoroughly and give a breif opinion. Regards please ask what kind of info you neend?? please read this case study and give your opinion simple Case Study Infosys is an IT...

Hi Katrina, I have another accounting problem I need your help with. It's similar to the one you did on 4/4/2016. The due date for this one will be 4/10/2016, Will you be able to help? See below...

Find an expression for Vo. Evaluate Vo rl 25k vl O Ry 10k RF r2 50k 50k v2 O R1 10k Vo VI O R2 7.1k V2 O R3 25k V3 O

Glutathione is a tripeptide found in most living cells. Partial acid-catalyzed hydrolysis of glutathione yields two dipeptides, CG and one composed of E and C. When this second dipeptide was treated...

What is the eight - hour exposure value referred to in OSHA standard 2 9 CFR 1 9 1 0 . 1 0 0 0 ? A . time weighted average ( TWA ) B . short - term exposure limit ( STEL ) C . permissible exposure...

In 2021, internal auditors discovered that PKE Displays, Inc., had debited an expense account for the $252,000 cost of a equipment purchased on January 1, 2018. The equipment's useful life was...

What physical conditions should be taken into account in the place where the scales are placed?

What do you think are the three most environmentally unsustainable components of your lifestyle? List two ways in which you could apply each of the three scientific principles of sustainability and...

Indicate which of these instruments are used to contain a volume: Burette, volumetric flask, pipettes, graduated cylinder, Erlenmeyer, Beaker

Eva Stone's home in Chicago was recently gutted in a fire. Her living and dining rooms were destroyed completely, and the damaged personal property had a replacement price of $31,000. The average age...

Running heats London In Olympic running events, preliminary heats are determined by random draw, so we should expect the abilities of runners in the various heats to be about the same, on average....

Kitchen Kraft Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Kitchen Kraft presently uses the multiple production department factory...

The management of Kitchen Kraft Appliance Company in Exercise 11-14 has asked you to use activity-based costing to allocate factory overhead costs to the two products. You have determined that...

Whirlpool Corporation conducted an activity-based costing study of its Evansville, Indiana, plant in order to identify its most profitable products. Assume that we select three representative...

2. Judy Johnson is choosing between investing in two Treasury secu- rities that mature in five years and have par values of $1,000. One is a Treasury note paying an annual coupon of 5.06 percent. The...

7. Below are demographic characteristics (GPA, PCAT, gender, and ethnicity) of students enrolled in pharmacy school (McLaughlin et al., 2014). Table 1 Demographic Characteristics of Students Who...

The table below shows hypothetical levels of average household debt and debt-service payments in two years, 2005 and 2008. Assume households are paying only interest on their debt and not part of the...