There were eight of us in that classroom.
Eighth grade. "Remedial science."
A polite way of saying: these students don't get it.
I remember staring at the poster on the wall - pictures of cells, diagrams of atoms - and feeling embarrassed. Everyone else seemed to understand this stuff. Why didn't I?
The teacher would explain mitochondria - "the powerhouse of the cell" - and I'd just sit there. What does that even mean? I couldn't picture it. Couldn't visualize any of it.
Biology was abstract. Chemistry felt like guessing. Physics might as well have been magic.
Year after year, science stayed my lowest grade.
But math? Math clicked immediately.
Numbers weren't open to interpretation. They didn't ask me to imagine things I couldn't see. They didn't depend on someone's theory being right today and refuted a hundred years later.
Numbers either tied or they didn't. No debate. No philosophy. No ambiguity.
And that difference? It shaped my entire career - and might explain yours, too.
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What We’re going to talk about
1. Why Some Brains Need Concrete Truth |
2. The Advantage of Working with Absolutes |
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Some people visualize molecules. Some see colors and shapes. Some write poetry that moves the world.
And some people - maybe you - find comfort in things that always make sense.
If that overlap landed you in finance and accounting, you're fortunate.
Because we get to work in a field grounded in absolutes. Not theories. Not abstraction.
And here's the part nobody tells you:
Most of Finance and Accounting is really just a giant puzzle.
All the pieces are right in front of you.
Your job is simply to organize them, shape them, and connect them until the picture becomes clear.
In science, the pieces change over time.
In our world, the pieces are fixed.
That’s what makes it solvable.
Think about our work:
1. The Balance Sheet Must Balance
The balance sheet is built on one equation:
Assets = Liabilities + Equity
It isn’t a suggestion - it’s the core of accounting.
Everything owed to the OWNERS of the business (Owners Equity)...
was funded by amounts put INTO the business (Owners Equity),
prior earnings not yet distributed (Owners Equity),
amounts borrowed from creditors (Liabilities),
or amounts that are expected to provide economic value and may be liquidated into cash (Assets)
If it doesn’t balance, something is wrong. Something is missing, duplicated, or misclassified.
The balance sheet forces truth. It is the ultimate error detector.
2. Bank Accounts Must Reconcile
A business can survive confusing metrics, but it cannot survive running out of cash.
Bank reconciliation ensures that what your accounting system says you have matches what the bank says you have.
If it matches, you can trust every downstream report.
If it doesn’t, you could be making decisions based on fiction.
Bank recs are the bridge between theoretical records and real-world money.
3. Cash Either Moved or It Didn’t
Most people think the cash flow statement is confusing.
But once you understand the balance sheet, it becomes simple.
The cash flow statement is just the net change in every account except cash.
If AR increases, cash went out.
If AP increases, cash stayed in.
If inventory increases, cash left the building.
It isn’t mysterious - it’s a translation of balance sheet movements.
4. How the Statements Connect (and Why This Lets You Model a Business)
Accounting becomes beautiful when you see how everything connects:
The income statement flows into retained earnings.
Retained earnings sits on the balance sheet.
Changes in balance sheet accounts create the cash flow statement.
Once you understand these relationships, you can build a full 3-statement model that shows profitability, liquidity, cash flow, and long-term trajectory.
One structure. One system. Everything connected.
This is the power of absolutes.
