Top 10 Basic Accounting Books for Beginners [Updated 2021]
The objective of accounting is to record financial transactions systematically in the books of accounts to find out the financial position of any organization. Below is the list of books on basic accounting that you must read in 2021 –
- Accounting Made Simple ( Get this book )
- Accounting for Non-Accountants ( Get this book )
- Financial Statements ( Get this book )
- Accounting Handbook ( Get this book )
- Schaum’s Outline of Principles of Accounting ( Get this book )
- Accounting All-in-One For Dummies ( Get this book )
- Accounting: The Ultimate Guide to Accounting for Beginners ( Get this book )
- Accounting QuickStart Guide ( Get this book )
- The Accounting Game ( Get this book )
- Bookkeepers’ Boot Camp ( Get this book )
Let us discuss each of the beginners accounting books that cover the fundaments, along with its key takeaways and reviews.
#1 – Accounting Made Simple
Author of this Accounting Book: Mike Piper
This short book offers a basic introduction to accounting principlesAccounting PrinciplesAccounting principles are the set guidelines and rules issued by accounting standards like GAAP and IFRS for the companies to follow while recording and presenting the financial information in the books of accounts. and terminologies. The author’s brief explanations and numerous concise examples make it the perfect reference book for people from a non-accounting background.
Few of the major takeaways from this book are listed below:
- Accounting EquationAccounting EquationAccounting Equation is the primary accounting principle stating that a business's total assets are equivalent to the sum of its liabilities & owner’s capital. This is also known as the Balance Sheet Equation & it forms the basis of the double-entry accounting system. and its significance
- Concepts and assumptions behind Generally Accepted Accounting PrinciplesGenerally Accepted Accounting PrinciplesGAAP (Generally Accepted Accounting Principles) are standardized guidelines for accounting and financial reporting. (GAAP)
- Calculating and interpreting several different financial ratiosFinancial RatiosFinancial ratios are indications of a company's financial performance. There are several forms of financial ratios that indicate the company's results, financial risks, and operational efficiency, such as the liquidity ratio, asset turnover ratio, operating profitability ratios, business risk ratios, financial risk ratio, stability ratios, and so on.
- Preparing journal entries with debitsDebitsDebit represents either an increase in a company’s expenses or a decline in its revenue. and credits
- Calculating depreciationCalculating DepreciationThe Depreciation Expense Formula computes how much of the asset's value can be deducted as an expense on the income statement. Formula for Straight-line depreciation method= Cost of an asset - Residual value/useful life of an asset. and amortization expenses
#2 – Accounting for Non-Accountants
Author: Wayne Label
This well-written book is focused on people who are new to accounts principles, as it lays out, for instance, different sequential snapshots of the balance sheet to demonstrate how individual adjustments should be treated.
Apart from providing basics of the books of accounts, the author focuses on a few major topics like:
- Dealing with audits and auditorsAuditorsAn auditor is a professional appointed by an enterprise for an independent analysis of their accounting records and financial statements. An auditor issues a report about the accuracy and reliability of financial statements based on the country's local operating laws. interpret financial statements
- Managing budgets
- Controlling cash flowsCash FlowsCash Flow is the amount of cash or cash equivalent generated & consumed by a Company over a given period. It proves to be a prerequisite for analyzing the business’s strength, profitability, & scope for betterment.
- Using accounting ratiosAccounting RatiosAccounting ratios measure the company's financial health by comparing the various elements of the financial statements to gauge the organization's progress over the period. There are four types of accounting ratios- liquidity, solvency, profitability and activity ratios.
#3 – Financial Statements
Author: Thomas Ittelson
Every term is defined in the simple, understandable language. Concepts are explained with basic, straightforward transaction examples. The author aims to provide a solid foundation for its readers to understand the concepts.
Few takeaways from this book:
- How the balance sheetBalance SheetA balance sheet is one of the financial statements of a company that presents the shareholders' equity, liabilities, and assets of the company at a specific point in time. It is based on the accounting equation that states that the sum of the total liabilities and the owner's capital equals the total assets of the company., income statementIncome StatementThe income statement is one of the company's financial reports that summarizes all of the company's revenues and expenses over time in order to determine the company's profit or loss and measure its business activity over time based on user requirements. and cash flow statementCash Flow StatementA Statement of Cash Flow is an accounting document that tracks the incoming and outgoing cash and cash equivalents from a business. work together to present any company’s financial health
- The visual approach, to see exactly how each transaction affects the three key financial statement of the enterprise
#4 – Accounting Handbook
Author: Jae K. Shim
A very informative and relevant book that takes an interesting approach to account. The author aims to focus the accountants, bookkeepers, and business students as it provides perfect examples and material for referring.
Few of the topics that the book addresses are as follows:
- Short-entry definitions of everything
- A detailed explanation of accounting terms
- Cost managementCost ManagementCost management is an integral part of business management that works on the basis of estimates, where various activities such as data collection, data analysis and mechanisms, process evaluation, and event reporting are carried out so that the decision-maker can plan and control the organization's budget requirements, allowing the decision-maker to make informed decisions., taxation forms, and their preparation
- Financial reportingFinancial ReportingFinancial Reporting is the process of disclosing all the relevant financial information of a business for a particular accounting period. These reports are used by the stakeholders (investors, creditors/ bankers, public, regulatory agencies, and government) to make investing and other relevant decisions. requirements and compliance, and U.S. GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards)
#5 – Schaum’s Outline of Principles of Accounting
Author: Joel J. Lerner
The book comprises a collection of solved problems in principles of accounting so that readers can easily connect the dots.
Few of the major topics covered in this book are as follows:
- Debits, credits, the chart of accountsChart Of AccountsA chart of accounts (COA) lists all the general ledger accounts that an organization uses to organize its financial transactions systematically. Every account in the chart holds a number to facilitate its identification in the ledger while reading the financial statements. , the ledger, inventory measurement, net realizable value, recovery of bad debts, and methods for computing interest
- Fixed assets, depreciationDepreciationDepreciation is a systematic allocation method used to account for the costs of any physical or tangible asset throughout its useful life. Its value indicates how much of an asset’s worth has been utilized. Depreciation enables companies to generate revenue from their assets while only charging a fraction of the cost of the asset in use each year. and scrap value, methods of depreciation
- Payroll and payroll taxesPayroll TaxesPayroll taxes are statutory deductions made by the employer from an employee’s regular salary and wages, and usually, such withholdings mostly have both employer and employee equal contributions. These taxes are collected by tax authorities from respective employers and paid for human welfare schemes, infrastructure development.
#6 – Accounting All-in-One For Dummies
Author: Kenneth W. Boyd
As the book promises on its cover with its title, it offers to impart learnings in simple and layman terms. The author consistently uses examples and analogies to make the topics interesting and relatable.
Some of the aspects of accounting that the book covers are as follows:
- Setting up accounting system; recording accounting transactionsRecording Accounting TransactionsAccounting Transactions are business activities which have a direct monetary effect on the finances of a Company. For example, Apple representing nearly $200 billion in cash & cash equivalents in its balance sheet is an accounting transaction.
- Adjusting and closing entriesClosing EntriesClosing Entries in Accounting are the journal entries made at the end of an accounting period to nullify the balances of temporary accounts by transferring the amount to the permanent accounts.
- Auditing and detecting financial fraud
- Planning and budgeting for businesses
#7 – Accounting
The Ultimate Guide to Accounting for Beginners
Author: Greg Shields
Providing a general overview of financial statementFinancial StatementFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels., analysis, and principles followed by the accounting practice, this book offers simple explanations that are easy to follow in order to relate the accounting terms and concepts in business usage.
Few major topics that the book covers are as below:
- The Cash Flow Statement
- The CPA and Public Accounting
- Tax AccountingTax AccountingTax accounting is the framework that considers the tax returns instead of public financial statements disclosure while recording and presenting the business transactions in the books of accounts. It complies with the rules and policies of the company's Internal Revenue Code.
- Accounting ReportsAccounting ReportsAccounting reports are created using a company's accounting data to check ledger-by-ledger transactions over a given time period. Accounting reports also include financial statements such as cash flow statements, profit and loss statements, and balance sheets.: The Income Statement
#8 – Accounting QuickStart Guide
Author: Josh Bauerle CPA
A very thorough book that covers almost all majors topics and terms in accounting; The book is very helpful for small business owners as it outlines the procedures to handle accounting for a small business.
Few of the major topics covered in the book are as follows:
- The Principles of Financial AccountingFinancial AccountingFinancial accounting refers to bookkeeping, i.e., identifying, classifying, summarizing and recording all the financial transactions in the Income Statement, Balance Sheet and Cash Flow Statement. It even includes the analysis of these financial statements., Managerial Accounting, and Tax Accounting
- Business Entity Types; Their Pros, Cons and Their Financial Statements
- GAAP Standards and their relevance to Accountants
- The Logic and Methods of Classic Double-Entry Accounting
#9 – The Accounting Game
Author: Darrell Mullis
Using the world of a child’s lemonade stand to teach the basics of managing finances, this book makes the subject enjoyable and understandable. The author makes readers use their senses, emotions, and critical thinking skills to learn. The book is mainly focused on business owners/managers, budding entrepreneurs.
Few of the key learnings that the book imparts are as follows:
- Business accounting proceduresAccounting ProceduresThe accounting procedure is the process of standardized nature that performs a specific accounting function designed to incorporate better risk management policies to complete these functions efficiently. It includes billings, invoices to suppliers, bank reconciliation, requiring comprehensive and streamlined procedures. and creating financial reports
- Financial Accounting
- Step-by-step processes for managing to account in business
#10 – Bookkeepers’ Boot Camp
Author: Angie Mohr
This book shows small business owners the essentials of record-keepingRecord-keepingRecordkeeping is a basic accounting stage that teaches us how to keep track of monetary business transactions with the goal of keeping a permanent record of all transactions, knowing the correct picture of assets-liabilities, profits and losses, etc., keeping control of expenses with the goal of minimizing expenses, and having important information for legal and tax purposes., and why it’s crucial to a business’s success to track financial data. The author shows the business owners how to sort through the information and paperwork, record what is important, and how to use that information to grow a business for success.
Some of the main learnings that the book imparts are as follows:
- Purpose of record/bookkeeping
- Analyzing and tracking financial informationFinancial InformationFinancial Information refers to the summarized data of monetary transactions that is helpful to investors in understanding company’s profitability, their assets, and growth prospects. Financial Data about individuals like past Months Bank Statement, Tax return receipts helps banks to understand customer’s credit quality, repayment capacity etc.
- Starting a business, growing a business, and exiting a businessExiting A BusinessA business exit strategy is a plan by which an individual running an existing business plans to liquidate his/her stake through sale or another transfer mechanism in order to make either a loss-making exit or meet immediate cash requirements.
Here is the guide to Accounting Books for Beginners. Here we provide the list of Top 10 Basic Accounting Books to read in 2021 & a sneak peek in what those books propose & takeaways. You may refer to the following books to learn more –
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