Module 2.docx - Module 2 Financial reporting for Not-for-Profit-Organizations NONPROFIT ORGANIZATIONS-Nonprofits are organizations that are not owned by

Module 2.docx - Module 2 Financial reporting for...

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Module 2: Financial reporting for Not-for-Profit-Organizations NONPROFIT ORGANIZATIONS -Nonprofits are organizations that are not owned by shareholders and are not intended to earn profit for distribution. Instead, nonprofits typically seek to earn revenue to distribute for programs, grants and other societal support systems. - Nonprofits use four main financial reporting statements: balance sheet, income statement, statement of cash flows and statement of functional expenses. Three of these are similar to common for-profit company statements, with the functional expenses statement being unique. Differences between Nonprofits and For-Profits Profit Corporatoions Nonprofit Owners Stockholders None Primary Mission Earned profit for stockholders Provide service needed by society Example of Revenues Sales of merchandise, fees from service, investment income Donor contributions, program fees, grants Sources of Money Other than Revenues Borrow from lenders, issue share of stocks Borrow from lenders Characteristics of Nonprofit Organizations 1. Public Service- Nonprofit organizations usually render services to society as a whole.

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