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Only some of the basic elements of financial accounting apply to Non-Profits. For example the income statement, while very relevant to for profit businesses, has little relevance to Non-Profits. Instead a more relevant financial report is the Statement of Functional Expense that shows expenses broken down between program, fund arising and administrative expense. Click below for more detail.
Non-Profits, particularly smaller organizations, are very susceptible to fraud. The second article below describes how such organizations can protect themselves.
The Fundamental Accounting Equation
A Simple Balance Sheet and Income Statement
Debits and Credit Transaction Posting Rules
8b. Another Cash Transaction Posting Example
Accounts Payable and Wage Withholding
Prepaid Expenses and Deferred Revenue
Inventory and Cost of Goods Sold
The Lower of Cost or Market Rule
Financial Statement Preparation
16. The Reliability of Financial Statements
Relative Measures of Economic Performance
View Lectures Michael Sack Elmaleh , CPA, CVA Some years ago the Exempt Organizations Division of the IRS posted on the IRS web site a controversial document setting forth the Service’s view on what constitutes good governance practices for tax-exempt entities. The document suggested that audit firms be rotated on a regular basis, with five […]
Read More...View Lectures The income statement provides some measure of a firm’s economic efficiency. A large net income usually tells us that something has gone right, while a large loss indicates that something is amiss. The same cannot be said about a non profit’s income statements (usually called the Statements of Revenue and Expense). Since the […]
Read More...View Lectures Protecting Small Non-Profits From Fraud: An Ounce Of Prevention Small non-profit organizations are very vulnerable to fraud.When I say small, I mean small: organizations that raise less than $100,000 per year and have only one or no paid staff person. I’m talking about neighborhood associations, sports and recreation leagues and all manner of […]
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