Accounts Demystified

By Anthony Rice

Accounts Demystified Book Front CoverOne thing I was sure of going into this project is that I would need at least a basic understanding of accounting principles. Whilst it might not be the most exciting of subjects, it is a valuable skill – not only to keep track of ‘the stash’ in a correct way (particularly where the tax man is involved), but in my opinion there is little that can be achieved in the world of business and investment without a fundamental understanding of accounts. Without knowing how to read accounts properly it is very difficult to ascertain whether a company presents a sound investment or a treacherous risk. Attempting to run a business without understanding a balance sheet and a P&L statement is equally dangerous – I’m not suggesting it requires being the one drawing them up, but without knowing how to read them it is difficult to imagine how someone could judge the standing of a business accurately. As such I sought out a book that would help me to ensure I had this basic skill going forward and after reading around a bit on the subject, this one came highly recommended.

It is clear to see why so many people were recommending this book. It takes a fairly dry and sometimes confusing subject and really does ‘demystify’ it. It follows the structure of a staged question and answer session taking place between the author and two individuals new to accounting – one who is setting up a new small business, and another who works for a large corporation and is concerned about its performance. This approach helps to put the reader in the centre of the subject and prevents it from becoming a dry ‘textbook style’ offering to a large extent. It also goes a long way to ensuring that both ends of the spectrum are covered – those who are interested in setting up or looking at small enterprises and those who are wanting to understand the performance of huge global organisations – and just about everything in between.

I took an accounting module in my first year at university (and got a fairly decent grade to be fair) but I can honestly say about 4 hours with this book has given me a far better grounding in the subject. Things are just put so plainly, and the question and answer structure helps things to sink in quickly. The diagrams and examples provided help to illustrate how things would work in practice and make it easily transferable to real situations. It can be read through chapter by chapter to give a real overview of the subject including how to construct and understand each aspect – this is probably the most effective way to approach the book. Alternatively it can be dipped into and out of for a particular need or circumstance for someone who just needs a few pointers here and there.

This book is an excellent introduction into the world of accounting

This book is an excellent introduction into the world of accounting

The Bottom Line: Whilst this book has really helped me to get to grips with the principles necessary to tackle accounts where necessary, I’m not trying to suggest that after a day with this book you will be ready to sit your ACCA Qualifications. I do feel however, that anyone looking to gain a broad understanding of basic accounting principles, and the ability to read and understand general accounts should have a look at Accounts Demystified. It will even be sufficient for most small business holders who may be looking to undertake their own accounts for the first time. Well worth spending a day or two with to ensure you have the skills to be able to ascertain the credibility, or lack thereof, of any future investment you may look to make.

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