We will present the basics of accounting through a story of a person
starting a new business. The person is Joe Perez—a savvy man who sees
the need for a parcel delivery service in his community. Joe has
researched his idea and has prepared a business plan that documents the
viability of his new business.
Joe has also met with an attorney to discuss the form of business he
should use. Given his specific situation, they concluded that a
corporation will be best. Joe decides that the name for his corporation
will be Direct Delivery, Inc. The attorney also advises Joe on the
various permits and government identification numbers that will be
needed for the new corporation.
Joe is a hard worker and a smart man, but admits he is not
comfortable with matters of accounting. He assumes he will use some
accounting software, but wants to meet with a professional accountant
before making his selection. He asks his banker to recommend a
professional accountant who is also skilled in explaining accounting to
someone without an accounting background. Joe wants to understand the
financial statements and wants to keep on top of his new business. His
banker recommends Marilyn, an accountant who has helped many of the
bank's small business customers.