Accounting For Dummies, 7th Edition

Accounting For Dummies, 7th Edition

by John A. Tracy, Tage C. Tracy
Released January 2022
Publisher(s): For Dummies
ISBN: 9781119837527

Read it now on the O’Reilly learning platform with a 10-day free trial.

O’Reilly members get unlimited access to books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Start your free trial

Book description

Demystify your financial statements and figure out what your accountant is talking about with this straightforward roadmap to the world of accounting

Few skills are as useful as a basic understanding of accounting language. And with the right resources, learning the language of business can be intuitive, empowering, and fun.

Accounting For Dummies is the perfect place to start, whether you're operating a small business, just need help managing the family budget, or you're a rising star in corporate America. It's a financial blueprint for the everyday person, easy-to-understand, and full of practical advice.

You'll learn the basic ABC's of accounting, how to read and understand financial statements, create best in class budgets & forecasts, craft profitable business plans, take control of your own finances, gain insight on how companies get money from investors and banks, and avoid common money mistakes that trip up even the best of us. You'll also find out how to:

  • Diagnose the financial health of your business and make a realistic plan to grow your company
  • Improve your own or your family's money situation with sound financial planning and understanding
  • Understand each of the three basic financial statements and what they say about a company's past, present, and future
  • Enhance your knowledge of how accounting functions and operates in today's digital age and cloud-based world

As a useful tool for business or as a guide to your personal finances, nothing compares to accounting mastery. And once you've nailed the basics, you'll wonder how you ever lived without this universal and beautiful language.

Table of contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Introduction
    1. About This Book
    2. Foolish Assumptions
    3. Icons Used in This Book
    4. Beyond the Book
    5. Where to Go from Here
  5. Part 1: Opening the Books on Accounting
    1. Chapter 1: Accounting in Today’s New Economy
      1. Checking Your Preconceptions about Accounting
      2. Providing Vital Financial Information
      3. Accounting’s Two Primary Roles
      4. Taking a Peek behind the Scenes
      5. Focusing on Transactions
      6. Taking the Financial Pulse of a Business
      7. Accounting as a Form of Art
    2. Chapter 2: Introducing Financial Statements
      1. Setting the Stage for Financial Statements
      2. The Income Statement
      3. The Balance Sheet
      4. The Statement of Cash Flows
      5. A Note about the Statement of Changes in Shareowners’ Equity
      6. Gleaning Important Information from Financial Statements
      7. Complying with Accounting and Financial Reporting Standards
    3. Chapter 3: Safeguarding Company Assets
      1. Separating the Duties of Bookkeepers and Accountants
      2. Pedaling through the Bookkeeping Cycle
      3. Managing Accounting Systems
      4. Enforcing Strong Internal Controls
      5. Double-Entry Accounting
      6. Juggling the Books to Conceal Embezzlement and Fraud
    4. Chapter 4: Accounting in the Digital Age
      1. Noting a Few Foundational Accounting Concepts Related to Technology
      2. Using Accounting Software in the Cloud and on the Ground
      3. Controlling and Protecting Money Flows in the Electronic Age
      4. Managing the Accounting Function in the On-Demand World
    5. Chapter 5: Recognizing the Legal and Accounting Entity
      1. Being Aware of the Legal Roots of Business Entities
      2. Going It Alone: Sole Proprietorships
      3. Differentiating Partnerships and Limited Liability Companies
      4. Incorporating a Business
  6. Part 2: Exploring Financial Statements
    1. Chapter 6: Reporting Profit or Loss in the Income Statement
      1. Presenting Typical Income Statements
      2. Taking Care of Housekeeping Details
      3. Being an Active Reader
      4. Deconstructing Profit
      5. Pinpointing the Assets and Liabilities Used to Record Revenue and Expenses
      6. Reporting Unusual Gains and Losses
      7. Watching for Misconceptions and Misleading Reports
    2. Chapter 7: Reporting Financial Condition in the Balance Sheet
      1. Expanding the Accounting Equation
      2. Presenting a Proper Balance Sheet
      3. Judging Liquidity and Solvency
      4. Understanding That Transactions Drive the Balance Sheet
      5. Sizing Up Assets and Liabilities
      6. Financing a Business: Sources of Cash and Capital
      7. Recognizing the Hodgepodge of Values Reported in a Balance Sheet
    3. Chapter 8: Reporting Cash Sources and Uses in the Statement of Cash Flows
      1. Meeting the Statement of Cash Flows
      2. Explaining the Variance between Cash Flow and Net Income
      3. Sailing through the Rest of the Statement of Cash Flows
      4. Pinning Down “Free Cash Flow”
      5. Limitations of the Statement of Cash Flows
    4. Chapter 9: Financial Accounting Issues
      1. Reporting Changes in Owners’ Equity
      2. Recognizing Reasons for Accounting Differences
      3. Looking at a More Conservative Version of the Company’s Income Statement
      4. Explaining Differences
      5. Calculating Cost of Goods Sold Expense and Inventory Cost
      6. Recording Depreciation Expense
      7. Scanning the Revenue and Expense Radar Screen
      8. Using the Statement of Cash Flows as an Audit/Sanity Test
  7. Part 3: Understanding Financial Reports, Financial Statements, and Financial Information
    1. Chapter 10: Producing Financial Reports
      1. Quickly Reviewing the Theory of Financial Reporting
      2. Recognizing Top Management’s Role
      3. Keeping Current with Financial Accounting and Reporting Standards
      4. Making Sure Disclosure Is Adequate
      5. Putting a Spin on the Numbers (Short of Cooking the Books)
      6. Comparing Public and Private Companies
      7. Dealing with Information Overload
    2. Chapter 11: Deciphering a Financial Report
      1. Knowing the Rules of the Game
      2. Making Investment Choices
      3. Contrasting Reading Financial Reports of Private Versus Public Businesses
      4. Explaining the Role of MDORs and MD&As
      5. Frolicking through the Footnotes
      6. Checking Out the Auditor’s Report
    3. Chapter 12: Analyzing Financial Information with Ratios
      1. Understanding the Importance of Using Ratios to Digest Financial Statements
      2. Improving Your Knowledge of Financial Language and Lingo
      3. Starting with Sample Company Financial Statements
      4. Benchmark Financial Ratios: Financial Strength and Solvency
      5. Benchmark Financial Ratios: Financial Performance
      6. Making Time for Additional Ratios (If Needed)
    4. Chapter 13: Generating Internal Financial Information for Management Use
      1. Building on the Foundation of the External Financial Statements
      2. Distinguishing Internal and External Financial Statements
      3. Gathering Financial Condition Information
      4. Culling Profit Information
      5. Avoiding Rookie Mistakes
    5. Chapter 14: Applying Wall Street’s Tricks and Treats to Engineer Financial Results
      1. Knowing What Financial Engineering Is Not
      2. Defining What Financial Engineering Is
      3. Identifying Commonly Used “Tricks of the Trade”
      4. Manufacturing Imaginary Profits (and, Yes, Losses)
      5. Looking Out for Particular Trends and Terminology
  8. Part 4: Leveraging Accounting in Managing a Business
    1. Chapter 15: Analyzing Profit
      1. Helping Managers: The Fourth Pillar of Accounting
      2. Internal Profit Reporting
      3. Looking at Strategic Profit Analysis
      4. Taking a Closer Look at the Lines in the Profit Template
      5. Using the Profit Template for Decision-Making Analysis
      6. Tucking Away Some Valuable Lessons
    2. Chapter 16: Accounting for Costs
      1. Looking Down the Road to the Destination of Costs
      2. Are Costs Really That Important?
      3. Becoming More Familiar with Costs
      4. Assembling the Product Cost of Manufacturers
      5. Puffing Profit by Excessive Production
    3. Chapter 17: Preparing Best-in-Class Forecasts, Projections, and Budgets
      1. Focusing on Key Forecasting Concepts
      2. Putting Forecasting in Its Place
      3. Exploring Forecasting
      4. Increasing the Power of Your Forecasts
      5. Seeing a Financial Forecast in Action
      6. Rehashing the Value of Forecasts
    4. Chapter 18: Capitalizing a Business: How, When, Why, and What
      1. Identifying the Elements of a Business Plan
      2. Valuing Businesses: A Crash Course in the Basics
      3. Surveying Commonly Used Business Valuation Techniques
      4. Summarizing the Two Basic Types of Available Capital
      5. Taking a Deeper Dive into Raising Debt Capital
      6. Digging Further into the World of Equity Capital
      7. Raising Capital: Tips, Tidbits, and Traps
  9. Part 5: The Part of Tens
    1. Chapter 19: Ten Tips for Managers
      1. Reach Breakeven and Then Rake in Profit
      2. Set Sales Prices Right
      3. Don’t Confuse Profit and Cash Flow
      4. Call the Shots on Accounting Policies
      5. Prepare Accurate Forecasts and Projections
      6. Demand the Accounting Information You Want
      7. Tap into Your CPA’s Expertise
      8. Critically Review Your Controls over Employee Dishonesty and Fraud
      9. Lend a Hand in Preparing Your Financial Reports
      10. Speak about Your Financial Statements as a Pro
    2. Chapter 20: Ten Tips for Reading a Financial Report
      1. Get in the Right Frame of Mind
      2. Decide What to Read
      3. Improve Your Accounting Savvy
      4. Judge Profit Performance
      5. Test Earnings Per Share (EPS) against Change in Bottom Line
      6. Tackle Unusual Gains and Losses
      7. Check Cash Flow from Profit
      8. Look for Signs of Financial Distress
      9. Recognize the Possibility of Restatement and Fraud
      10. Remember the Limits of Financial Reports
  10. Index
  11. About the Authors
  12. Connect with Dummies
  13. End User License Agreement

Product information

  • Title: Accounting For Dummies, 7th Edition
  • Author(s): John A. Tracy, Tage C. Tracy
  • Release date: January 2022
  • Publisher(s): For Dummies
  • ISBN: 9781119837527