To avoid future financial misunderstandings, all transactions should be properly recorded. I believe that not properly recording transaction number 8 could have caused big financial problems in the future. The transaction goes: The company receives $2k to its A/R ($3k). A/R decreases by $2k and cash increases by $2k. These transactions occur in the "assets" section, not affecting liabilities or equity. Money was changing titles from abstract to concrete. Money was going from A/R to cash. No new revenue was added. Revenue remains the same because it had already been recorded before. Keeping the balance in the statement. For a second, I thought that when the customer paid $2k, all of the above steps would be done, but I would have to also add $2k to revenue. By doing so, I could have unbalanced my totals. I would have had a hard time trying to figure out why my totals did not match. This was done with one transaction, now imagine having multiple of these same transactions wrongly recorded. I believe it could lead to unknown revenue/ "lost money", adding extra money that the company did not make, tax problems, and more problems that I am just yet not aware