Govern

1) Both for-profit and nonprofit organizations create these financial reports to share their financial standings. However, these reports differ slightly in content and approach, as for-profits often focus the report on generating more profits while nonprofits focus on the programs, research and services provided by the organization.

2) The budget is more important because unlike a business which relies upon marketplace, revenues and expenditures are controlled strongly by the budget for any government and not-for-profit organization. A government organization’s revenues may be determined by legislative fiat and a not-for-profit organizations may be obtained from contributions, dues, tuitions, and user charges which are completely separate from the sales that a normal business operation experiences.

3) They expect the financial statements to report on how the budget is administered.

4) Interperiod equity is a government’s obligation to disclose whether current-year revenues were sufficient to pay for current-year benefits—or did current citizens defer payments to future taxpayers.

5) The matching concept is not relevant because government and not for profit is not a revenue generating company. Governments and not for profits are concerned with measuring interperiod equity.

6) Governments must maintain an accounting system that assures that the restricted resources are not used inappropriately and wastefully.

7) Because even governments within the same category will engage in different types of activities and governments not in the same category have little in common.

8) If a government has the power to tax, then it has access to its resources. Therefore, its fiscal well-being cannot be assessed merely by measuring the assets that it owns.

9) Man governments budget on a cash or near cash basis. However, the ash basis of accounting does not provide adequate information with which to assess interperiod equity. Financial statements that...