If you think reading a book is the worst way to learn accounting, think again.
The Accounting Game Book
This post is a review for The Accounting Game: Basic Accounting Fresh from the Lemonade Stand by Darrell Mullis & Judith Orloff. The book was published in 2008 by Sourcebooks.
What's the book about?
Every entrepreneur or aspiring investor should know how accounting works. From recording business transactions to understanding how a company stands at a point in time, accounting is all-encompassing.
But accounting by no means is an easy topic to discuss. In fact, some people who've been in business for a long time still find the "language of business" complicated.
Mullis and Orloff's book aims to be a solution to that learning hurdle. What the authors did is they applied the necessary accounting skills to an unexacting but relatable business: a lemonade stand.
They also added a story element to the imaginary lemonade stand, enabling them to introduce more accounting topics to readers as the story progresses. As readers follow along with the transactions on the lemonade stand, they learn how to account for certain transactions like purchasing inventory through credit, how revenue is recorded, depreciation methods, and others.
What is great about the book?
The book is written by people who are entrepreneurs, not accounting professionals. Judith Orloff was involved in education throughout her career, and Darrell Mullis' Amazon page states that he hasn't taken any official finance course.
That fact could be counterintuitive since accounting -- by conventional wisdom -- should be taught by those who practice accounting professionally. However, an approach to learning that dives right into its practicality is quite unique, and that is what the authors had done in this book.
Another positive thing to point out about the book is that the business model (lemonade stand) they chose made it easier for readers to keep track of the numbers. Yes, shrinking the numbers to one or two digits is far from business reality, but it does help someone without a clue in grasping the concepts easily.
As mentioned, the way the book is structured is like a story that introduces new accounting skills as readers flip through the pages. This is significant since it makes reading the entire book entertaining and educational at the same time.
The book's visual aids help readers in keeping up with all the transactions. For example, having an illustration of the balance sheet appear constantly makes it easier for readers to remember what's been added in the lemonade stand's asset, liabilities, and equity after each chapter. The visual aids were superb in facilitating a better comprehension of the accounting skills.
The main flaw of the book:
The simplicity of the book is also its primary flaw. The book was written in such a way that it would seem, in certain chapters, like its too elementary. Those with a background in accounting who are just looking for some material to rekindle accounting skills may find themselves not too enamored with the book.
Certainly, the book's appeal is tailored to those without any accounting background and is plainly interested in knowing the nuts and bolts of accounting. Obviously, the book can't replace textbooks on the subject because it doesn't go much into detail. For example, the book doesn't tackle journal entries, chart of accounts, adjusting entries, accounting principles, and other concepts that are necessary to have a more holistic understanding of accounting.
Who benefits from this book?
With this book, anyone can learn accounting on a very fundamental level. The Accounting Game is perhaps ideal for entrepreneurs who have accountants or bookkeepers working for them but would like to understand what goes on in the financial side of things.
For would-be entrepreneurs, this is also a great initiation to the world of accounting. An entrepreneur's two strongest qualities are probably self-starting, and creativity, but a good command for the language of business can help them along the way.
Students of accounting can make use of this book to gain some practical application of accounting skills that will reinforce the theoretical aspect learned in school. But for advanced topics, they would have to resort to a different book.
For newbie investors, the book could help them appreciate financial statements and the process in producing them; they would know what to look for and interpret in a financial statement, but not at a level that is sufficient to make an investment decision.
The Accounting Game book is perhaps the easiest way for anyone to learn accounting. Check it out from Amazon by clicking on the button on the right.