You may have heard that accounting is the "language of business." I couldn't agree more, but most of the accounting guides I've come across are too technical and too complicated. Accounting doesn't have to be so hard. Most of the concepts in accounting are fairly basic once you get down to their essence. But most accounting professionals learned about accounting in college, and did so using very technical books taught by very technical teachers. And for good reason! Accounting is a very precise and technical discipline if you intend to do it as a career. There are lots of rules to follow and hard tests to pass if you want to become a CPA. But once you do all that hard work, the curse of knowledge kicks in and it becomes very difficult to go back to those basic principles when you explain things. This guide is an attempt to explain accounting's basic principles using simple language by someone who has spent most of their 22+ year career in various accounting roles. I'll do my best to keep it as simple as possible using as little jargon as I can muster. If you think I've screwed it up, please email me at email@example.com and I'll do my best to fix it!
This book will teach you the basics of accounting using normal, everyday language as often as possible. We will need to use some technical jargon, but I will introduce it using everyday language and try to use it sparingly after that if I can. We'll start by going over some of the reasons accounting is important so that you have some motivation to read this guide. It will then go through the mechanics of accounting including how to record a transaction so that you can analyze the information later. Once we have the mechanics down, we'll show you how to interpret and analyze the reports you create. We'll describe some of the key things to look for when analyzing results, but more importantly I will teach you about how to think about results from first principles using the concepts we'll describe throughout the guide. You'll find it much easier to find insights in financial reports when you go back to those core concepts. If you get caught up trying to memorize the rules, I think you'll have a hard time making sense of everything — there are too many rules to remember unless accounting is your profession!
This book should appeal to:
Having a firm grasp of mathematics will also help, but is not necessary. There are some sections (like lifetime values) that require a bit of math, but most of the lessons can be consumed without thinking about math too much. There is a lot of logic involved, though!
I am a lifelong accountant. I started my career in "Big 4" as an auditor, but have done forensic accounting, auditing, consulting, financial/business analysis, and am currently a CFO. I passed the CPA exam on my first try back when everything was done on paper and did well on the exam. I'm also fairly technical (e.g., see xlcat).