Question

I am learning about an accounting for government and NFP.

I would like to ask you about For-Profit vs. Government and NFP.

Could you tell me the differences and similarities among them?.

Answer 1

Particulars	For Profit	Government and Not for Profit organisation
Objective	The principle objective is to maximise profit for the owner of business	The principle objective of government or NFP is to carry out maximum welfare activity in line of its mission/objective with the available resources
Usage of Profit	Earned profit is either used for expansion of business or distributed to owners	Earned profit is recycled i.e. more welfare activities are aimed from profit
Taxes	Usually this organisation are subject to taxes on income	Usually this organisation are not subject to taxes on income
Book Keeping Principles for revenue and expenses	The core book keeping principle for accountin of revenue, expenses are same for organisation for profit & not for profit	The core book keeping principle for accounting of revenue, expenses are same for organisation for profit & not for profit
Book Keeping Principles for assets and liabilities	Broadly assets and liabilities are not ear-marked	Broadly assets and liabilities are ear-marked i.e. they are utilised for specific purpose. E.g. Education fund balance is used only towards education activity and no other activity
Financial reporting	They Prepare : Balance Sheet Profit & Loss Statement Cash Flow Statement	They Prepare : Statement of Financial Position Statement of activities Cash Flow Statement
Main operating Principle	Maximise Profit	Maximise Revenue with reduction in cost

Hope above is helpful. Do let me know in case you need further information through comment