Accounting Demystifie

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This book makes an excellent companion to any standard text, or it can be used as a stand-alone volume. It is designed to present the subject in a straightforward, approachable manner. Financial accounting is an incremental process. What you learn in earlier chapters is used in later ones. There are no shortcuts to learning financial accounting, but at the same time, if it is taught clearly, it is not difficult.

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The organization of this book is intended to present the material in the order in which it needs to be understood. Therefore, we start with the end product of financial accounting, the financial statements, then jump back to the first step in the accounting process, making journal entries. This may seem out of order, but it follows the way accounting is best understood and learned rather than following the chronology of how accounting is done.

You cannot be a good accountant if you are not a good bookkeeper. Bookkeeping is considered a lower-level profession than accounting, and this perception is accurate because accountants possess skills that bookkeepers do not. However, the first step in learning accounting is to learn bookkeeping. What makes it accounting and not simply bookkeeping is going beyond just recording the entries into such areas as preparing the financial statements, analyzing the statements, and making necessary adjusting entries at the end of the accounting period.

A last thing to keep in mind when reading this book and looking at the examples and descriptions is that how things are presented and how they are arranged are highly variable in practice. Companies and managers adapt forms, schedules, and statements to meet their own needs (within the existing rules). Except as specifically prescribed by accounting guidance, there is an abundance of flexibility. A nimble mind will come in handy in trying to reconcile what is described in this book with what you may see in the real world. Sometimes these will be the same and sometimes there will be minor differences in presentation, but even given that variability, it should not be hard to take what you learn from this book and relate it directly to real-world situations.