Ed Ng Is a Friend of Yours from University

question 20

Essay

Ed Ng is a friend of yours from university.After finishing high school he decided to open his own human resources consulting business rather than working for a large bureaucratic organization.He recently opened his business,and has contracted his services to a number of local retailers.He is paid a monthly fee for his services.
He has just received his first set of financial statements from his accountant.He is quite upset.The statements show a cash balance of $7,200 at the end of the month,but a net income of only $1,000.He has written you a letter,asking you whether such a situation is possible,or whether he should find another accountant.
Please explain to Ed what happened.

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Definitions:

Organizational Principle

A fundamental concept or guideline that drives the structure and behavior within an organization or system.

Gestalt Psychologists

Psychologists who focus on understanding the laws of our ability to acquire and maintain meaningful perceptions in an apparently chaotic world.

Perceived Whole

The comprehension or interpretation of something as a complete and unified entity.

Gestalt Principle

A theory in psychology that describes how people tend to organize visual elements into groups or unified wholes when certain principles are applied.