I first encountered “The Accounting Game”, by Darrell Mullis and Judith Orloff about ten years ago when I was a software developer for a firm that sold point-of-sale/inventory/accounting software for tire stores. I don’t even remember who first recommended this book, but soon my manager bought a copy for the development group to use in coming up to speed on accounting principles, terminology, and concepts.
The book teaches accounting from the point of view of a kid opening a lemonade stand for the summer. You start out simply enough, but as the summer progresses you start handling more and more complex situations. All the while you track the stand’s progress through Balance Sheets, Income Statements, and Cash Statements. These statements start out simply and then increase in complexity as new concepts are introduced and as the business becomes more complex.
I found the book quite entertaining and educational the first time through. The concepts stuck with me, and now that I have my own business I bought my own copy of the book to help train my partners and our employees should we need a backup bookkeeper. There is a newer edition out now, with I believe a new chapter on how service businesses differ from businesses that sell goods.
There are a few drawbacks to the book. For one, it gets repetitive. They try to keep it light and cutesy, but by the time they’ve asked you the same question three different ways on the same page you start to get a little annoyed. Yes, repetition is key to learning, but this book sometimes goes too far.
The other problem is that it’s supposed to be hands-on. Every few pages you are supposed to fill out a new copy of the various accounting forms to reflect the new changes to the business. That’s fine if you–and only you–are going through this book for the first time. But once you’ve written in the book no one else can use it, nor can you come back and review. And since the forms morph as the complexity increases, you can’t just photocopy a bunch of blank forms to use throughout the book. What would be ideal is if they included some laminated forms you could use a whiteboard pen on and wipe clean for another time.
But for the most part, this book will leave you with a good idea of the main areas of accounting reporting. You should be able to pick up a company’s balance sheet and make sense of what you see. You should know what the balance sheet does and does not show, and where you need to go to find out the rest of the picture.
I’m pretty sure (and I’m tempted to test this theory) that my ten-year-old daughter could understand this book. The book is fun and engaging, so you don’t like you’re being talked down to too much. The examples are fairly concrete and easy to grasp, tapping into a fairly common experience from childhood. Even if you never sold lemonade as a child, you can understand what is going on.
I recommend this book for anyone who would like to understand accounting from a high level. Most would-be business owners really should understand the principles taught in this book in order to be successful. This book is a fairly enjoyable and inexpensive way to learn those basic accounting principles.
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