In the case of a small individual business or having such utility, it is unlikely that an expenditure of funds, an input or output, or an income from production will be counted twice.
Lacking such a system, we would end up double counting incomes and expenditures of interacting units, exaggerating the quantity of value-added or investments.
The system of gross and netting actually used, is ultimately based on a value theory,[2] which specifies what may generally count as: In other words, we cannot relate, group and aggregate prices in different ways without making some value-based assumptions that enable valid comparisons.
Once the principles of the value theory are established, categories and counting units can be exactly and logically defined, as a basis for mathematical operations to aggregate the flows of incomes and expenditures.
An individual business buys and uses up inputs and produces outputs for sale; it has costs and revenues.