A for-profit company is run to make money, whereas a non-profit is run to help others either human, animal or the planet. A non-profit may have a number of general ledger or funds, whereas a for-profit will generally just have one general ledger. The use of the different ledgers is to help in identifying individual sources of funds and their uses.

Some similarities between nonprofit and for-profit organizations is that they both have goals and mission that are well defined. Both organizations should strive to satisfy their stakeholders or customers and serve accordingly. Both are limited in funds and must strive to meet their goal with the funds available. They both have a board of directors, management and different levels within their staff.

A couple of differences is that in a nonprofit organization, their is third party funding from such things as donations, grants and government funds, whereas for-profit companies get their money from sales or investors. Generally nonprofits have volunteers and for-profits have employees that are hired for a wage or salary.

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.

There are quite a few differences between for profit and not-for-profit (NFP) reporting. To begin the financial statements have different directions or purposes. For profit companies want to show how they can earn profits in hopes of impressing investors. Not-for-profits are more concerned with showing what contributions they received and how little was needed to make the company run. In addition, not for profits will show more details on how the money was spent. The financial predictions, general layouts, objectives and goals, and budgets are all different. Some of the similarities that exist between reporting guidance for-profit and not-for-profit organizations include, both types of organizations report their financial activities in accordance with GAAP. The similarities for not-for-profit and for profit are the balance sheet also known as statement of financial position for NFP. Both show the assets and liabilities. Both use a statement of cash flows to show inflows and outflows, both report their income and expenses on their version of an income statement also known as a statement of activities, and both follow