• Home Page
  • For-Profit Vs Government Accounting Paper

For-Profit Vs Government Accounting Paper

Improved Essays
Show More
CAFR Briefing and For-profit vs Government Accounting
Carrie Noderer
ACC/548
September 1, 2014
Douglas Traster

CAFR Briefing and For-profit vs Government Accounting
There are many differences between accounting for for-profit businesses and accounting for non-profit organizations and government entities. Some of these include the different parts of the financial statements that are important for both, and how different goals require emphasis of different reports.
There are quite a few differences between government and for-profit business accounting. One of these is the main goal for accounting for each. A typical business’s main goal is to earn a profit. Financial statements expand on net income because net income is a measure of …show more content…
Government entities and non-profit organizations have management discussion and analysis (MD&A), which more or less take the place of the notes to financial statements. The MD&A includes information regarding whether or not the organization is reaching its goals and staying within its budget. It also includes financial information, but more of that is regarding how much of its money is going towards the various areas of the entity, such as services and necessities that are required in order for the agency to meet its goals. It also includes descriptions of where its income is coming from, such as donations, taxes, fees, etc. and whether or not it is successful in meeting the requirements that is was expected to meet.
The differences between for-profit accounting and not-for-profit or government accounting are vast due to the different goals of different entities. Businesses’ main concern is net worth and growth, while non-profit and government’s main concern is budget and accountability. The different requirements and focuses come from these different …show more content…
The MD&A for the Paradise Valley Unified School District is an introduction to the CAFR, and goes over what the CAFR includes, particularly three general components: government-wide financial statements, fund financial statements, and notes to the financial statements. It also gives a brief overview and summary of what will be included in the CAFR and goes over some of the highlights (“Paradise Valley Unified School District”, 2012).
Comparing the CAFR and MD&A to for-profit financial statements brings a greater understanding of the different requirements, expectations, and objectives of for-profit organizations and non-profit or government agencies. The goals are very different, which makes the financial statement focuses different and requires the focuses in the financial statements to differ greatly. Overall though, financial statements for all organizations need to clearly show money coming in and going out, and where this money is coming from and going

Related Documents

  • Improved Essays

    Best Care Case Study
    • 485 Words
    • 2 Pages

    Best Care Case Study

    a.) In this income statement the operating expenses are included as opposed to the other two in which there is no operating income. b.) One of the income statement reflects a non-profit organization and the other a for profit business. You can tell because the for profit business must account for how much they think they will pay in income taxes that year, hence, one statement has a provision for income taxes.…

    • 485 Words
    • 2 Pages
    Improved Essays
    Read More
  • Improved Essays

    Busn642 Research Paper
    • 489 Words
    • 2 Pages

    Busn642 Research Paper

    BUSN642: Nonprofit Chart of Accounts A chart of accounts in the most basic definition is a list of accounts that is used to show the various accounts that meet the needs of the organization; and although all chart of accounts may contain some general areas of focus and categories, each organization may vary in some of the details of the accounts listed. The larger and more complex an organization may be, the more accounts it may have, which is why it is important that chart of accounts be numbered in a logical way and follow any standards for its specific industry (NetMBA, n.d.). Accounts will vary according to the organization. Many organizations may now use accounting software to aggregate information into their financial statement (Accounting Tools, n.d.). The chart of accounts is important because an organized list of accounts data lays the foundation for keeping track of any transactions going in and out of the organization and provides the status of the accounts to those making decisions internally…

    • 489 Words
    • 2 Pages
    Improved Essays
    Read More
  • Improved Essays

    Asc740-10 Analysis
    • 256 Words
    • 2 Pages

    Asc740-10 Analysis

    Under the guidelines of the FASB, a company must be accountable for any type of income that whether it be incurred or paid out to another person or persons. One of the guidelines that focuses especially on the issue of income tax liability is ASC740-10. According to an article taken from Brewer, both types of companies whether they be profit or non profit entities are all susceptible to this particular guideline and must adhere to the standards which are set forth regarding tax liabilities and how these companies should report them in a proper manner. In order for a company to be fully accurate regarding its tax status, it needs to take into consideration all forms of financial activity that have taken place over the course of each year including:…

    • 256 Words
    • 2 Pages
    Improved Essays
    Read More
  • Improved Essays

    Est1 Task 1
    • 627 Words
    • 3 Pages

    Est1 Task 1

    Introduction The managers of organizations use financial statements to keep track of the performances by reviewing what they are currently producing and what they have produced over an extended period of time. It is vital to these decision makers to have a clear picture of where their organization currently stands and have the ability to identify trends. This data will help create the properly constructed plans to help an organization grow as they will evaluate the strengths, weaknesses, opportunities, and threats that influence the business. Income Statement…

    • 627 Words
    • 3 Pages
    Improved Essays
    Read More
  • Improved Essays

    Gasb Case Study
    • 649 Words
    • 3 Pages

    Gasb Case Study

    They include agency funds, which use accrual basis accounting. However, since they are fundamentally custodial accounts they do not use a measurement focus. 2. How do the three major financial statements of a public college or university differ from those of a private not-for-profit college or…

    • 649 Words
    • 3 Pages
    Improved Essays
    Read More
  • Improved Essays

    Accg/399 Task 1
    • 662 Words
    • 3 Pages

    Accg/399 Task 1

    Having the opportunity to learn ACCG 399 has allowed me to gain the most valuable and helpful experience throughout three years of Bachelor study. And what I have attained the most are from the study of social, institutional and accounting professional aspects. Throw back to the conventional explanation of accounting regarding its practical application in the corporation fields, it has been defined as the process of undertaking analysis, preparing and recording the financial information of a venture, with the intention to deliver useful guidelines to various uses in the decision making. Prior to undertake this unit, my comprehension of accounting were merely revolving around the technical perspectives relating to taxation, financial accounting…

    • 662 Words
    • 3 Pages
    Improved Essays
    Read More
  • Improved Essays

    Nonprofit Versus For-Profit Healthcare Organizations Essay
    • 664 Words
    • 3 Pages

    Nonprofit Versus For-Profit Healthcare Organizations Essay

    Introduction This written assignment will be an analysis of the comparisons of nonprofit versus for-profit healthcare and their organizations. It will analyze the characteristics of each healthcare organization and indicate the factors that impact their operation. It will discuss the options to improve the operational and financial performance of nonprofits and for-profit healthcare organizations. Non-profit versus for-profit healthcare organizations Non-profit hospitals can be public or private healthcare organizations and the majority of U.S. hospitals are categorized as non-profit and usually exempt from paying taxes.…

    • 664 Words
    • 3 Pages
    Improved Essays
    Read More
  • Improved Essays

    The AICPA Relationship In Auditing The Auditing Standards For Public Accounting
    • 924 Words
    • 4 Pages

    The AICPA Relationship In Auditing The Auditing Standards For Public Accounting

    The American Institute of Certified Public Accountants (AICPA) is the world’s largest representation of certified public accountants (CPAs). Established in 1887, the AIPCA serves as an advocate for CPAs, CGMAs, and has a mission of powering the success of global business, CPAs, and CGMAs through the use of education, resources, and advocacy (AICPA, 2016). The AICPA supports FASB by providing technical support, standard setting, and guidelines to CPAs nationwide. Because accounting is complex in nature this governing body works in collaboration with other institutes to ensure that organizations are adhering to the accounting standards established under the General Accepted Accounting Principles (GAAP). This paper will focus primarily on the AICPAs relationship in advising the FASB, their function in setting the auditing standards for public accounting firms and their relationship with authoritative rule making boards such as The International Accounting Standards Board (IASB), The Government Accounting Standards Board, and the HFMA Principles and Practice Board.…

    • 924 Words
    • 4 Pages
    Improved Essays
    Read More
  • Improved Essays

    Nonprofit Organizations: Financial Analysis
    • 514 Words
    • 3 Pages

    Nonprofit Organizations: Financial Analysis

    Assignment 3 One important aspect of the nonprofit world is the undeniable need for accounting and transparency of organizations. Prior to 1994, nonprofit organizations used fund accounting to represent balanced sheets. Fund accounting offered an overall picture of the organization’s finances in a complicated fragmented way, in other words it made reporting difficult and therefore seeing a clear picture of the organizations finances became very challenging (McLaughlin, 2010). On the other hand, according to McLaughlin (2010), the Financial Accounting Standards Board (FASB) created the Statement of Financial Accounting Standards (SFAS) 117, whose main purpose was to make financial statements from nonprofit organizations readable and usable by stakeholders. Furthermore,…

    • 514 Words
    • 3 Pages
    Improved Essays
    Read More
  • Improved Essays

    Non-Profit Agency Analysis
    • 453 Words
    • 2 Pages

    Non-Profit Agency Analysis

    I have worked for many years for a non-profit organization and have have the privilege of being able to compare a nonprofit environment to that of a for profit company. In my experience, I have seen what goes in to acquiring donations from individuals and what their reaction's are to the amounts that may be asked of them. For example, people see my agency as a community based agency that helps people in all aspects of their lives: economically, socially, environmentally and even in the health field. As an agency we offer programs that provide mental health services, youth programs, group homes for the mentally impaired, resources to help with rental deposits, food banks, diaper banks and many other services that help the people in the community.…

    • 453 Words
    • 2 Pages
    Improved Essays
    Read More
  • Great Essays

    A2 Milk: Case Study Questions And Answers
    • 1998 Words
    • 8 Pages

    A2 Milk: Case Study Questions And Answers

    Question 1: A. In evaluating a company should an investor rely more on accounting profits or cash flow An investor should give his or her decisions basing on a statement of cash flows because: The greatest difference between profits and cash flows is that profits data use accrual accounting, while cash flows base on real figures. Precisely, profit data will be recorded in the current period regardless of a company received money or not. Meanwhile, the other expenses such as wages, interest and rents must be paid by cash.…

    • 1998 Words
    • 8 Pages
    Great Essays
    Read More
  • Improved Essays

    Zara's Financial Statement
    • 775 Words
    • 4 Pages

    Zara's Financial Statement

    1.1. The Profit and Loss Statement First, the profit and loss statement is one of the factors that indicates how financially healthy a company is, considering it as the reflection of the company’s cash flow.…

    • 775 Words
    • 4 Pages
    Improved Essays
    Read More
  • Improved Essays

    Accounting Equation Of An Income Statement Of Burberry Company
    • 1042 Words
    • 5 Pages

    Accounting Equation Of An Income Statement Of Burberry Company

    With this accounting equation, it is presented to give you an idea of a double entry accounting. And when a company borrows from the bank, a company 's cash account can increase and its liability account loans payable will increase. If the company pays for advertisement their cash flow will decrease but the account advertisements expenses can increase. Connections between an income statement and Balance sheet Each of the financial statements is on separate sheets for the annual financial report, here is a quick explanation how they working from the top to the bottom.…

    • 1042 Words
    • 5 Pages
    Improved Essays
    Read More
  • Improved Essays

    Financial Accounting Vs Managerial Accounting Essay
    • 822 Words
    • 4 Pages

    Financial Accounting Vs Managerial Accounting Essay

    By one using this type of accounting one is able to determine how to better improve the overall state of the company. It will help improve long and short term goals, monitor progress, follow trends, and assist with the control of decisions. While all of these are important managers need to assure accounting ethics are being followed to accurately determine the success of the company. Financial and managerial accountings are both ways to track data of an organization and they have similarities and differences. The biggest difference between financial and managerial accounting is, financial accounting is to inform outside parties of the company’s economic state, and managerial accounting to provide information to the organization.…

    • 822 Words
    • 4 Pages
    Improved Essays
    Read More
  • Superior Essays

    Reflection Of Financial And Accounting
    • 1536 Words
    • 7 Pages

    Reflection Of Financial And Accounting

    Upon the completion of this course I have come across topics that have interested me and increased my knowledge especially in the financial and accounting aspect. This course has introduced me to understanding the relationship between financial and accounting in making an effective strategic decision. In as much they sound alike they are different and used in different purposes, both accounts are important to the business but are used for different purposes. Financial statements are requirement for any organisation and are published at the end of a financial period for its stakeholder, shareholder and customers to see, they show reports of performance on a historic basis and what has been achieved over the years. At the time the statement is…

    • 1536 Words
    • 7 Pages
    Superior Essays
    Read More

Related Topics

Ready To Get Started?
Discover
Company
Follow
©2025 Cram.com
Privacy Policy |  Cookie Policy |  About Ads |  Site Map |  Advertise  | 
  • Cookie Settings