The Accounting Function

The Accounting Function at Goodwill Industries

Goodwill Industries is a major charitable organization that relies primarily on financial and non-financial donations and grants. It has retail operations that help sustain its financial operations so as to fulfill its mission to help train, support, and employ disadvantaged individuals and those with disabilities.

The video introduces the accounting function and the specific steps involved in the accounting cycle. The similarities and differences between for-profit and not-for-profit entities are discussed in detail. The importance of accounting in providing financial information and analysis is featured. Emphasis is placed on financial statements as well as ratio analysis in helping gauge the financial health of the organization.

Accounting is crucial for all organizations, whether they are a small business, large corporation, or a governmental or not-for-profit organization. The different types of accounting are discussed, including managerial, financial, tax, auditing, governmental, and not-for-profit. Balance sheets, income statements, and statements of cash flows provide important information for managers and others in the organization helping to demonstrate whether the organization is on budget or whether there are variances between projected and actual revenues. Costs and expenses have to be kept in line and are carefully monitored and analyzed by the accounting function.

Sufficient cash flow is critical to the sustainability of any organization, particularly the not-for-profit organization; in this case, Goodwill. Not-for-profit organizations utilize performance ratio analysis to gauge their overall financial performance. The results of these analyses help management assess the organization's performance against its plan or budget. They also help to develop strategic plans for the future as well as to benchmark against other similar companies.

1. What are some of the key differences between assets and...