Not For Profit Financial Reporting Submit your responses to the following questions in a 1-2 page...

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Not For Profit Financial Reporting
Submit your responses to the following questions in a 1-2 page summary MSWord document. Label each question clearly. For computations done in an Excel spreadsheet, please copy and paste your work into your MSWord document. For written answers, please make sure your responses are well written, APA formatting, and have the proper citation, if needed.
1. Explain how organizations in the not-for-profit sector differ from organizations in the public sector or for-profit business sector. Provide an example of an entity in each sector.
2. Which standards-setting bodies are assigned responsibility for establishing accounting and financial reporting standards for not-for-profit organizations? What issues remain unfinished on the FASB’s technical agenda for not-for-profit organizations?

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Robert · Accepted Answer

Difference between For Profit & Non for Profit Organizations 
There are various differences between for profit and not for profit organizations. The 
basic difference is between the goals and objective of both organizations. The former 
concentrates on maximization of profit while the latter does not. This has significant influence on 
the type of accounting methods followed by each organization. For profit organizations base 
their accounting around quarterly income, non-profits formulate statements that revolve around 
their activities only.  (Drucker, 2005) 
When a For Profit business is started, it is established for the financial benefit of its 
owners and shareholders. Profit is the main objective of business and taxes are paid on that 
profit. On the other hand, a nonprofit organization has the objective that benefits greater good of 
the community, society or the world. A not for profit organization does not have owners. It is not 
required to pay taxes and the funds are to be used for fulfillment of the mission for which it was 
formed.

Not For Profit Financial Reporting Submit your responses to the following questions in a 1-2 page summary MSWord document. Label each question clearly. For computations done in an Excel spreadsheet,...

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