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Differences or similarities between For Profit Accounting and NonProfit Accounting?
2 Answers
- 8 years agoFavorite Answer
While the fundamentals of accounting don't change in either case, there are important differences between the two. In nonprofit accounting, which is also known as fund accounting, equity is retained by the classification of donor intent. What that means, essentially, is that nonprofits need to prove that the donor's intentions have been met. In nonprofit accounting, expenses are also classified by function: program, fundraising and administrative. At a basic level I would suggest researching FASB standards 116 and 117, as well as nonprofit financial statements as they are different from their for-profit counterparts. You can also check out https://www.blackbaud.com/fund-accounting/WhyNonpr...
Source(s): I wrote the aforementioned white paper and I am the Treasurer on the Board of Directors of a nonprofit organization.
