Could this be the best accounting book for beginners?
Let's find out…
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Hey there welcome back to the channel I'm James this is accounting stuff and
today we're going to be reviewing this book. The Accounting Game.
Basic accounting fresh from the lemonade stand. What a book?
This is YouTube? I hear you
but this channel is all about helping you learn accounting.
And whilst I think YouTube has been revolutionary in helping us pick up
and understand things quickly, I think there's still something
to be said for going old school you know?
I want you to ask yourself this question… Have you ever watched a video on YouTube
and thought… That that was amazing!
I need to just take all of that and put it in here
and just apply it in my daily life and then two days later you're like…
I can't even remember what that video was about
Well that happens to me all the time.
and that is why I like to supplement all of that YouTube knowledge
with some longer form content like books.
To help reinforce these ideas and make sure they end up in here in my long-term memory.
So I'm not gonna just forget it in a week's time.
Now I'm going to let you in on another little secret…
I'm not a reader. I’ve battled with reading for years and
years the only books I could ever really get to
the end of were the Harry Potter ones and yeah partly that's because I never
realised that I needed glasses. But also I'd just find books so so boring
and there are too many distractions. And what kind of books the
most boring of them all? Accounting books.
Wait
No
Accounting books.
I was chatting the other day to one of my viewers, Winston
on Instagram and he said that the Finance and Accounting books that
he'd read broke new records in boredom and that he wouldn't even recommend
these to his foes. When you won't even recommend
a book your worst enemies… Well that's not a good sign is it?
But Winston is totally right. There are way too many
accounting books that pay far too much attention to detail and end up becoming
500 page monsters that I wouldn't even touch if my life depended on it.
But is that always the case? Are all accounting books like that?
I decided to do some research and see if there were any
accounting books out there that won't have us all running for the hills.
Anyway during my research one title kept popping up.
This one
The Accounting Game. I think I mentioned this one during my
first ever video on the accounting equation but today I'm
gonna do a full review of this book and tell you everything that I liked
and didn't like about it, and then I'm gonna rate it out of five.
To help you decide whether it's worth your time.
Every month or two I’d like to release more book reviews alongside my
usual tutorials so if you'd like to see more of these then don't
forget to subscribe. And if you have any suggestions
let us know down below in the comments so that we can share these
books amongst ourselves and find the good ones.
Who knows maybe I'll even end up reviewing it on this channel?
Let's do this...
The Accounting Game:
Basic accounting fresh from the lemonade stand published by Sourcebooks,
produced by Educational Discoveries. I think this is the revised edition
that was released in 2008. I picked up the paperback version
on Amazon that I think goes for around $14. So I'll link that down below for you
in the description. There's also a slightly cheaper
version for the Kindle. But I would actually advise you against
getting that one the reasons that will become clear shortly.
So who's it written by? Well there are actually two authors.
The first one is Judith Handler Orloff from Burlington College in Vermont.
Not to be confused with Judith Orloff the clairvoyant.
Yeah that confused me a bit in my research.
And the other author is Darrell Mullis
Businessman and entrepreneur who surprisingly has never
taken an official course in finance. Now why should we want to learn accounting
from someone who's never taken an official course in finance?
Well actually I think that could be one of the books biggest strengths.
Hmm… interesting. They say in the intro
and let me see if I'll get this right. Most attempts to teach
accounting fail because people pay too much attention to detail and forget to
convey the bigger framework or picture of the subject…
Yeah that's that's not right. We think the most attempts to
teach accounting fail because of too much attention to details and a failure
to present the big picture framework of how it all works and fits together.
We promise not to overburden you with the details and to focus on what are the
really key concepts of accounting that any business person needs to know.
I think that the author's lack of formal financial training
helps them deliver on this promise of not overburdening us with the details.
But does it mean they miss the mark on some of the accounting principles?
Hmm… lets find out. This book takes you all the way back
to your childhood. Over the course of a long hot summer
you decide to set up a lemonade stand at the corner of your street and start
selling your product to your neighbours and passers by.
In this fictitious scenario you face a whole bunch of problems that mirror the
ones that small business owners go through. From making that initial investment
and taking out a loan from a bank. To hiring your first members of
staff, managing your inventory and selling your first product.
Spoiler alert At the end of the summer
you decide to liquidate your whole business. So we have the whole business
lifecycle in this book. While all of this is going on
you are actively keeping a record of each financial transaction and
summarising them in the three major financial statements:
The income statement, the balance sheet
and the cash flow statement. So what did I like about this book?
Well it held my attention and that is impressive because I fail to get
to the end of a lot of the books that I read. It’s short.
At 179 pages you can get through this in two to three days.
The authors build a vivid picture of this world in which your selling lemonade.
I mean I never sold lemonade as a kid but now I feel like I'm a veteran.
Darrell and Judith do a fantastic job of leading you
into new concepts like showing the income statement
and the balance sheet as scorecards before revealing their
true form further into the book. This helps you as the reader
understand these ideas intuitively before they go and throw
all that technical jargon at you. I feel that the book is really well structured.
The ideas just flow into one another so smoothly.
Things like the accrual versus cash method, capitalisation versus expenses
and cash versus profit are all just delivered to you so fluidly.
They make great use of colour in reflecting the liquidity of assets
and visually it's just a great book to read. There's a glossary at the back
that has descriptions of all of the major accounting terms.
So I found myself flicking backwards and forwards to this page quite often.
They introduce the reader to the idea of creative accounting.
Legitimate, legal ways to present your books to reduce or postpone
your taxes.
Food for thought if you're running your own business…
But by far the biggest thing that I like in this book is that it's interactive.
There are heaps of examples to work through as you make your way through the book.
They'll help you test your knowledge and reinforce these ideas to get the most
out of this book. You'll need a pen to fill out the answers
as you work your way through and a highlighter so that
you can note down all of the key sections. When I finished this book I went back
through it and noted out all of my favourite ideas on the Notes app
on my laptop. So now I can access all of these
anywhere, anytime on my phone if I need my memory jogged.
So that's everything I liked about the book but what's not to like?
Well at first glance I was worried that they were going to oversimplify things.
But that really isn't the case. The examples start quite easy but then
they get progressively more and more difficult as you make your way through
the book. Not too quickly though so don't
worry about that. The underlying accounting is sound
and should be more than enough for a small business owner.
That being said. If you're experienced you might find
this book quite easy and maybe it doesn't have all of the detail
that you want. But then the book isn't aimed at you anyway.
Darrell and Judith promise not to overburden you with the details
and this is basic accounting that we're talking about.
However I was surprised that this book didn't really mention debits and credits.
They focus on balancing the balance sheet instead.
Which I suppose gets the job done but I’d still like to see
debits and credits in here. There's also no mention of GAAP or IFRS
which are the principles and standards that govern accounting
or the indirect cash flow statement but they do have the
direct cash flow statement. Maybe some of those topics are
beyond the scope of this book. And one more thing.
The lemonade stand in this book is a product based business so
that's the focus here. On businesses that have inventory.
I do appreciate though that in this revised version they've added a chapter
on service businesses so you can see how the accounting differs in
the income statement between these two types of business.
Darrell and Judith say that this book is for all of you who have
hated accounting, had difficulty learning it
or ever thought you didn't really get it. But I would go a step further and say
that even after studying accounting this was a great read.
I am quite frankly amazed that an accounting book was able
to hold my attention to the end. And it was refreshing to take
a step back and see the whole framework of accounting
from a different point of view. This is an accounting book for beginners
so you could argue that it's light on the detail
but in some ways that's how it delivers. You could always supplement this with
some further reading once you’ve got the hang of it.
After much deliberation I'm going to give it…
Four and a half stars. I was considering going even higher
but this is my first book review so there has to be room for improvement.
I would highly recommend this to anyone running a small business.
You'll get a lot of value out of this book. I'd also recommend it to anyone
who's studying accounting. Don't be put off if you think
it looks a bit childish. This book will help cement
your understanding of how accounting works
in the big picture. If you'd like to pick up a copy
I'd appreciate it if you use the link down in the description.
It's an affiliate link so you get the chance to support this channel
and get a copy of the book at no extra cost to yourself.
Let us all know if you've got any other accounting book recommendations
down in the comments. If you'd like to learn more
about accounting. Then don't forget to subscribe to the channel.
I've made a whole playlist of accounting basics videos
that you can find right here.
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