Question

Identify 5 differences and 5 similarities of non-profit Financial statement in comparison with a Federal Government Financial statement?

Answer 1

Differences of Non- profit Financial Statement and Federal Government Financial Statement:

1. Both organisation also have thier own accounting standard. The government follows the Government Accounitng Standard Board (GASB) and non- profit follows the Financial Accounitng Standard Borad(FASB).
2. Government Agencies used the Statment of Net Assets and Non- profit use the Statement Financial position.
3. Every government organisation maintain Comprehensive Annual Financial Report (CAFR), but no such requirement is with no- profit orgnaisation
4. Unlike non- profit statment , Government financial stvenue atement does discrimiate between capital expenses and revenue expenses.
5. Government exist longer than non- profit businesses and are not subjet to bankruptcy and dissolution
6. Most government revenues are raised through involuntary taxes rather than a willing exchange of comparable value between two parties in a typical business transaction.
7. Governments serve a broader group of stakeholders than profit businesses, including taxpayers, citizens, elected representatives, oversight groups, bondholders, and others in the financial community.

Similarities of Non- profit Financial Statement and Federal Government Financial Statement:

1. Both Government and non - profit organisation follows Generally Accepted Accounting Principles (GAAP)
2. Both of them require a greater need for transparency because constituents and donors want to know where their money is going.
3. Non-profits and governments report with two common financial statements: The Statement of Activities and Statement of Cash Flows.
4. Both of them require reduced human error.
5. Both of them follow same accounting period.