Review: 'Accounting Made Simple' by Mike Piper. What's the difference between cash and accrual accounting? What's a balance sheet, and how do you. caite.info: Accounting Made Simple: Accounting Explained in Pages or Less (): Mike Piper: Books. Accounting Made Simple: Accounting Explained in Pages or Less - Kindle edition by Mike Piper. Download it once and read it on your Kindle device, PC.
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You can reach me at: [email protected] Best Regards, Mike Piper Table of Contents 1. Accounting Equation Always true, no exceptions Owners' Equity. Accounting Made Simple: Accounting Explained in Pages or Less Author: Mike Piper Accounting for Goodwill (Routledge Studies in Accounting). Accounting Made Simple () provides a brief introduction to the fundamentals of accounting, illustrating how to read the most important financial statements.
Though I'm not completely satisfied with this book, you can't be too picky when trying to find a summary that is pages or less On the other hand, financing a company primarily with loans is obviously a risky way to run a business. Mike Piper. Matching Principle According to GAAP, the matching principle dictates that expenses must be matched to the revenues that they help generate, and recorded in the same period in which the revenues are recorded. If you're looking to take the CPA exam, this book isn't for you. Need an account? The order above is perhaps the most logical but presenting principles before their application risks making them An introductory text on accounting should in some form or another include:
Josh's research and writing have helped millions of people worldwide learn the fundamentals of modern business. All rights reserved. The Personal MBA: All excerpts from the book are published under agreement with the publisher. This material may not be reproduced, displayed, modified, or distributed in any way without the express prior written permission of Worldly Wisdom Ventures LLC.
Buy the book: Print Kindle Audio Get the audio free. Print Kindle. Related Books: Related Ideas: Purchasing Power Compounding Amortization. About Josh Kaufman Josh Kaufman is an acclaimed business, learning, and skill acquisition expert. The Personal MBA. The author has solved this in a rather clever way.
He presents various accounting principles as they are needed to understand the practical application that is covered next by the text. Mike Piper is the author of introductory level books on an array of economic areas. This text aims to give a quick basic understanding of accounting and bookkeeping. Most major line items on the financial statements are given a short but adequate explanation and topics such as the difference between current and long term balance sheet items, operating vs.
To help the reader draw conclusions from the financial statements part one ends with a chapter on financial ratios. Two or three ratios each are presented under the headers liquidity ratios, profitability ratios, leverage ratios and asset turnover ratios.
This is all fine but in his efforts to simplify for the benefit of the user Piper in one instance goes too far. The numerator in return on assets is not the same as the one in return on equity. Return on assets uses pre-tax income plus financial costs, not net income. Part two is a mix of accounting principles, bookkeeping and a few slightly more complicated financial statement topics.
After briefly discussing FASB and GAAP, the author describes the bookkeeping process with the debits and credits of the double-entry accounting, T-accounts, general ledgers and trial balances. Piper then proceeds with a chapter on accrual accounting, - this separation of cash inflows and outflows from recorded revenues and expenses that is perhaps one of the less intuitive ones for the non accountant reader and that is also the arena for most of the accounting irregularities in real life.
However, accruals are important to understand as the topic next in line is the closing of the books.
The book totals ninety-seven pages and so Piper has three pages to spare. The discussion on how to close the books could have benefited from at least one of these. It is a bit too brief to be educative I would also dedicate one page to a flow chart between the financial statements to complement part one.
Who is the main beneficiary of this book? However, it is absolutely perfect for a one day read prior to taking a university class in accounting.
Everything the teacher says during the course will make perfect sense. It is a very simple introduction, but sufficient enough to help me recalling my long lost school time accounting within a very short period of time.
Mar 03, Toe rated it really liked it Shelves: Objective Summary Piper summarizes the fundamentals of financial accounting in less than pages. Key points: Accounting is the language of business. This equation is always true with no exceptions. Through algebra, the accounting equation can be rewritten as: Cash accounting records revenues when received and records expenses when paid. Accrual acc Objective Summary Piper summarizes the fundamentals of financial accounting in less than pages. Accrual accounting records revenues and expenses when they are accrued, regardless of when cash changes hands.
In cash accounting, the manufacturer records revenue in February. In accrual accounting, the manufacturer records revenue in January. Accrual accounting more accurately reflects economic reality. Accounting has four basic financial statements: Balance Sheet, b. Income Statement, c. Statement of Retained Earnings, and d. Cash Flow Statement. Income Statements are recordings over a period of time, typically one year or one quarter, showing income and expenses during that period of time.
Dividends are not expenses, and retained earnings are not the same as cash. Closing entries zero out Income Statement balances at the end of the period, and additional entries transfer the balances to the Statement of Retained Earnings. Cash Flow Statements show the flow of cash, as opposed to the Income Statement which typically shows accrual accounting.
GAAP allows investors to understand and compare the financial health of different companies. In most cases, GAAP makes the following assumptions: Assets are recorded at their historical cost i.
Immaterial items may not require their own journal entries. The matching principle requires expenses to be matched to the revenues they helped generate, and they must be recorded in the same period that the revenue is recorded.
Financial accounting uses a double-entry system involving debits and credits. Debits are to the left and credits are indented to the right in journal entries on the general ledger. Every material transaction has a journal entry of debits and credits involving at least two accounts.
DEALOR is a useful acronym for remembering which accounts are increased by debits and which by credits. For example, a sale of services paid for in cash when the services were delivered may involve a debit to cash an asset and a credit to revenue. Alternatively, under accrual accounting, the same sale of services may involve a debit to accounts receivable an asset , and a credit to revenue. Tangible assets lasting longer than one year are depreciated such that the cost of the asset is expensed over multiple periods.
Straight-line depreciation depreciates the asset equally over its useful life. Gains and losses are recorded if the asset has salvage value and is sold at a price above or below the book value at the time of the sale. The double declining balance method accelerates depreciation by using a percentage double that which would be used in the straight-line depreciation method. Amortization is the same as depreciation except that the former applies to intangible assets while the latter applies to tangible assets.
Inventory can be either 1 perpetual or 2 periodic. Perpetual inventory tracks each item sold and the COGS for that item. For example, retailers using barcodes may use a perpetual inventory system.
Periodic inventories are measured periodically e. A periodic inventory system requires assumptions about which items of inventory were sold. The choice of assumptions is: Average cost Subjective Thoughts Less is more, and Piper is hella efficient.
This book did an outstanding job of summarizing the financial accounting fundamentals. It should be a useful quick-reference guide to any business majors, sole proprietors, entrepreneurs, bookkeepers, investors, or laypersons with interest. The information contained in this book is required for success in any of these areas.
What I most appreciate about this particular book is the lack of fluff, filler, or obfuscation. I get the distinct impression that Piper is trying to convey the information as easily as possible rather than dazzle me with his own knowledge.
I picked that trick up from my accounting professor—thanks Wayne Thomas. This is a minor quibble because few would argue that a page pamphlet could adequately replace a college degree. It would be great to have this style of book on a many topics.
The quest for knowledge continues. Dec 27, Chandan Kumar rated it really liked it. I came across this book through Amazon's suggestion while purchasing Thomas Ittelson's popular title. A few reviews were raving about its simplicity; so I thought to have a go at it too. True to its words, the book is a beautiful primer and a good beginning point for lessons in Accounting. In pages, it does a fantastic job of giving a quick glance through all types of financial statements, and why they are presented in that fashion.
Starting from why owner's equity often is nothing more than I came across this book through Amazon's suggestion while purchasing Thomas Ittelson's popular title. Starting from why owner's equity often is nothing more than a plug figure, it goes on to build tricky concepts like why dividend is not considered expense, etc. Every concept is explained with plenty focused examples which helped me get the hang of it.
Specially the Debit-credit conundrum for different types of accounts has been explained brilliantly, that too without resorting to so called 3 Golden principles.
On a side note, the Golden Principles are too glittery, and often confuses beginners like me. Mike Piper's approach of giving intuitive explanation I find more useful than these so called principles. But simplicity has its costs. It does not try to dwell on how Gross Profit Margin has implications for Inventory. Having learned most of these topics through Youtube videos recently, I wasn't really hoping this book to be more than just a revision material.
But it proved to be much more than that.
Because of its simplicity and limited scope, it did not take more than two hours to finish And borrowing from accounting jugglery, cost-benefit ratio in that sense was really good. Recommended for the noobs. Feb 18, Mihai Cosareanu rated it really liked it. I think the book is a good glossary for terms in accounting, but if you want to understand the concepts better with examples and exercises, I would recommend this book: Also, if afterwards you want to take these concepts and understand how can you use these in making decisions as a business owner, this book is a good complement for the McGraw Hill Course: Sep 21, Santiago Mas Mas rated it liked it.
Not really your best choice in case you already have previous accounting knowledge. Recommended for anyone not having read a word in their lives about accounting.
For all other re Not really your best choice in case you already have previous accounting knowledge. For all other readers, keep searching for something with more substance. Jul 22, Kristin Hopper rated it liked it. It's a great super simple read that I picked up for a coworker that wants to learn accounting and has no experience. I wanted to read it before giving it to her to ensure it wouldn't be completely confusing.
For a novice, it's great because each chapter has a brief example of what the accounting procedure would look like in a business setting. If you're looking to take the CPA exam, this book isn't for you. It's just a VERY broad overview of accounting. Think of this as the cliff notes version o It's a great super simple read that I picked up for a coworker that wants to learn accounting and has no experience.
Think of this as the cliff notes version of accounting textbooks. Overview of just basic concepts. Obviously as the author mentions and given just pages, this book is a simple review of general bookkeeping concepts.
I recommend this to anyone with zero knowledge and seeking to step up next level without steep learning curve. Nov 03, Adam rated it it was amazing Shelves: Hot dang, learned a thing or two!
Of digestible intro books consumed this one is by far the best. The author in truth knows their biz to such a degree as to get right at the essence. No nonsensical, "and here's the more complicated case