This straightforward bookkeeping method records each financial transaction with a single entry in a journal. For instance, a cash sale would be noted only as an increase in cash, without an offsetting entry. This simplicity makes it appealing to businesses with uncomplicated financial structures and limited transaction volume.
Its primary benefit lies in its ease of use and minimal training requirements. It provides a basic overview of income and expenses, facilitating fundamental financial tracking. Historically, this approach predates more complex accounting systems and served as the foundational method for small-scale record-keeping. The system’s usefulness stems from its direct representation of cash flow, making it easily understandable for non-accountants.
