[MUSIC] The only accounting that Christina has done so far is to keep track of all the payments and receipts of cash. And so, she has prepared this list with all the different payments, payments for the furniture, for the software, not for the inventory, yet, right? And then also all the receipts. Receipts in this case is the cash raised, the capital that she has raised, and also the loan she got from the bank. Now my question to you is the following. As you see this is, we can call this cash accounting. So it's some sort of accounting. You keep control of what's going on in the business. Now my question to you, is this enough to control the business? Is there any information we are missing here? If you were the uncle of Christina, and you were asking for a summary of report of all, everything that has happened in the business for the last month, would you be satisfied with this? Well, first, by looking at the list of receipts and payments, you already realize that we don't see for example, the inventory because we didn't pay for it. Or that we only see the part that we paid of furniture and equipment. But the full value of the equipment was 25,0000. In other words, we are missing any purchase that we didn't pay. So this is the first shortcoming. Second, we have no clue about how much money we owe. For example, the furniture and equipment, we just paid 15,000, we still owe 10,000 to the suppliers, but that doesn't show here in this document. Finally, we need some sort of control about where is the money coming from. Now maybe, it's very easy because we are in the very beginning. But after a few seasons, after a few fiscal years, I mean we don't keep track with this cash and receipts system. We don't keep track of who lends me the money to start with, I mean even last year you cannot be re-checking all these transactions all the time. So we need some kind of document that accumulates all these sources of capital that we have etc. So the summary is that any transaction that does not involve cash, is not going to be reflected in this document that Christina prepared. Be careful, with this, I'm not saying that this document is not important because actually, any business is interested in the amount of cash that they receive and the amount of cash that they pay. It's essential, it is crucial that we keep track of all the receipts and all the payments. So that we make sure that the business doesn't run out of cash. We are actually going to discuss again this statement in future sessions. But what is clear by now is that we need some other document, an additional document that controls for all these shortcomings. In the next video, we're going to introduce a new system to account for all these transactions so that we don't miss any piece of information. [MUSIC]