Accounting Game : Basic Accounting Fresh from the Lemonade Stand
Author: Darrell Mullis & Judith Orloff
Publisher: Sourcebooks, Inc
Publication Date: 1 March 2008
Number of Pages: 179
I still remember that when I walked around in bookstore, the book’s title and cover design draw my attention to open the book. Honestly, it is rare to find a colourful accounting book with pictures and a story behind. Therefore, I bought it and read through it in a weekend.
It is a book for people without accounting background, but also a book helps any startup company owners to know their financial figures or business plan using an example of lemonade stand.
The books are written by two persons, Judith Orloff and Darrell Mullis. Orloff has been in education industry for more than 25 years by transforming people lives through self-awareness and education. She is also the founder Burlington College in Vermont, US and Educational Discoveries, Inc.
Mullis has been teaching learning technology and developed training programs for trainers for twelve years. He has also taught over 300 Accounting Games seminar in US.
From their background, I know this accounting book is different from what I read in the past as most of the books I read are written by accounting professionals or university professors.
Content in brief
At the beginning, authors ask readers to imagine they are going back to school and establish a lemonade stand right after summer holiday starts. They use this example throughout the book to explain accounting concept. The first concept introduced is accounting equation.
Imagining running a stand, you will learn and apply financial terms such as assets, liabilities, notes payable and owner’s equity. The book then introduces one of three financial statements, the Balance Sheet.
Operating a lemonade stand, you need to take care of sales revenue and expenses. Two concepts gross profit and net profit are followed as you need to understand them to know your business. When all these concepts are discussed, authors tell you what is income statement.
The chapters after income statement are mainly explaining accounting terms and concepts. Examples include (but not limited to) accrual method, cash method, creative accounting, inventory valuation methods (FIFO, LIFO), capitalisation, assets depreciation, taxes and liquidation.
In the first few chapters, you are taught what is balance sheet and income statement. When it comes to the last few chapters, Orloff and Mullis explain to you what is cash flow statement. After that, they show to you what are the differences between profits and cash. Cash helps to run the business on a daily basis while you need to keep cash around. However, profits are theoretical and do not equal cash. Profits are an objective measure of your lemonade stand operating efficiency, productivity and innovation.
In the last chapter, Orloff and Mullis bring a tool to you on how to improve the lemonade stand profits. They share with you it is better to look at ratios (and trend analysis) and see the cost/profit for each dollar of revenue.
Darrell Mullis & Judith Orloff
1 Mar 2008
My opinion on the book
As I said above, the reason why I bought the book is due to its funny pictures on the cover as well as the design in each page. I have to admit I haven’t gone through in each details before paying.
The book is written in plain English and easy to read. The authors, as mentioned, are working in education industry and know very well on guiding you through to understand difficult topics with examples and stories. There are many exercises in the book while you can remember key terms through working those worksheets.
In addition, the colourful design is very attractive to me as I seldom read a colourful accounting book.
The lemonade stand is a very good example showing how does the accounting for startup company work, as it is simple and easy to understand.
Nonetheless, I find some areas could be done better. First, the chapter flow is not very well organised. I find some concepts and sentences are repeated over and over which annoys the reader.
Next, it is a book good for weekend reading but you are not easy to pick up something after reading for reference. Last but not the least, it’s supposed to be hands-on. You are supposed to fill out a new copy of various accounting forms to reflect the new changes to the business. It is only fine if you are going through this book for the first time.
If you are completely new to accounting or have an idea to own your startup company, this book can help you to understand accounting with authors’ game approach. It is a good book for weekend or leisure reading when you are interested to know what is accounting.
However, it is not ideal for people would like to refresh their accounting knowledge. It is too simple and basic. In addition, it is not easy to pick up something in the book after reading for reference in your daily work.
Comparing this book with Mike’s ‘Accounting Made Simple: Accounting Explained in 100 pages or Less’, I prefer my readers with little accounting training to choose Mike’s book for refreshing their accounting knowledge.
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