I’m working on a accounting discussion question and need an explanation and answer to help me learn.
PART 1
Prior to beginning work on this discussion forum, read the article Cracking the Nonprofit Accounting Code.
Based on the information presented in the article, discuss:
- How and why does the accounting system used by governmental/nonprofit entities differ from the system used by for-profit entities?
- How does the annual financial report of a governmental/nonprofit entity differ from the report of a for-profit entity?
- The user of a for-profit financial report is usually interested in the bottom line, net income. What are some top interests of the user of the financial reports of a governmental/nonprofit entity?
PART 2
State or local government entities can engage in governmental activities as well as business-type activities. Provide two examples of each activity type. Discuss how and why accounting and financial reporting differs between the two types.
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