There are two main types of bookkeeping systems: single-entry and double-entry bookkeeping.
Single-entry bookkeeping: This system is similar to maintaining a checkbook. Each transaction is recorded once, either as an income or an expense. It is simple and suitable for small businesses with minimal transactions.
Double-entry bookkeeping: In this system, every transaction affects at least two accounts, with one account being debited and another credited. This method ensures accuracy and provides a complete picture of the financial situation. It is the standard system used by businesses of all sizes.