Question

Respond to the following in a minimum of 175 words:

Discuss the major similarities and differences in accounting for for-profit and not-for-profit organizations. Be sure to consider differences in organizational ownership, fund accounting, and financial reporting.

*Please do not copy & paste from a prior answer, I mean no disrespect by any means but some of those answers are not helpful and the reason I posted a question. Thanks, I appreciate any assistance.

Answer 1

Answer:

1)Similarities between for-profit and not-for-profit organizations:

• Not-for-profit associations have boards,management and staff for effective working, same as present in for-profit  associations.

• The sources for both the not-for-profit and for-profit associations are restricted, and they need to accomplish their objectives by utilizing those constrained available funds.

• As the for-profit associations report their fiscal reports toward the end of the accounting time period, the not-for-profit associations are additionally required to report toward the end of the accounting time frame.

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2)Contrasts between for-profit and not-for-profit  associations:

• The  ownership of the for-profit associations is held in the hands of entrepreneurs, investors or sole owner or partners. where as the ownership for not-for-profit associations will be held by trustees, governing bodies or advisory group individuals.

• The funds of the for-profit will be raised by share capital,bonds, loan,etc.. what's more, the administration needs to account them appropriately and need to report its usage to the investors every once in a while. the funding sources of not-for-profit associations is by method for government grants, gifts, and so on these subsidizing or funding ought to be appropriately represented and reported to the governing bodies.

• The fiscal reporting in the event of for-profit associations ought to be made to the investors in the form of income statement, cash flow statement, and balance sheet toward the end of accounting period. the not-for-profit associations needs to report as receipts and payment account, income and expenditure account and balance sheet at the end of accounting time period