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    Acounting

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    Bilal Ahmed
    Nonprofit organizations aim to provide for society's needs rather than maximize profits for owners like for-profit companies. They must ensure revenue exceeds costs to continue operating rather than prioritizing profits. Nonprofits are also usually tax exempt which helps minimize their costs so they can further increase social welfare, unlike for-profits which must pay taxes on net income. These differences in goals and tax treatment between the two sectors influence their distinct accounting methods.

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    Acounting

    Uploaded by

    Bilal Ahmed
    14 views1 page
    Nonprofit organizations aim to provide for society's needs rather than maximize profits for owners like for-profit companies. They must ensure revenue exceeds costs to continue operating rather than prioritizing profits. Nonprofits are also usually tax exempt which helps minimize their costs so they can further increase social welfare, unlike for-profits which must pay taxes on net income. These differences in goals and tax treatment between the two sectors influence their distinct accounting methods.

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    Nonprofit organizations aim to provide for society's needs rather than maximize profits for owners like for-profit companies. They must ensure revenue exceeds costs to continue operating rather than prioritizing profits. Nonprofits are also usually tax exempt which helps minimize their costs so they can further increase social welfare, unlike for-profits which must pay taxes on net income. These differences in goals and tax treatment between the two sectors influence their distinct accounting methods.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    14 views1 page

    Acounting

    Uploaded by

    Bilal Ahmed
    Nonprofit organizations aim to provide for society's needs rather than maximize profits for owners like for-profit companies. They must ensure revenue exceeds costs to continue operating rather than prioritizing profits. Nonprofits are also usually tax exempt which helps minimize their costs so they can further increase social welfare, unlike for-profits which must pay taxes on net income. These differences in goals and tax treatment between the two sectors influence their distinct accounting methods.

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    © All Rights Reserved
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    For-Profit and Nonprofit Organizations

    There are several differences between for-profit and nonprofit organizations. While the aim of for-profit
    organizations is to maximize profits and forward these profits to the company's owners and
    shareholders, nonprofit organizations aim to provide society's needs. Non-profit organizations have no
    owners. Instead of maximizing profits, which means maximizing revenues while minimizing costs, they
    are more concerned with ensuring the revenue is greater than costs. This ensures that the nonprofit
    can still provide society's needs.

    Tax Exemption
    For-profit organizations must pay taxes on their net income, but this is not true for nonprofits if they
    are exempt from taxes. If a nonprofit's goal is to increase the welfare of society, governments tend to
    help this cause by minimizing the nonprofit's costs as much as possible. It is these differences between
    the two types of organizations that have an impact on each type's accounting methods. When a tax-
    exempt nonprofit submits their accounts to the IRS, they are only assessed for taxes that are
    secondary to

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