Interm Acct Essay

1. What is the defining distinction between for-profit businesses and not-for-profit, including governments? What are the implications of this distinction for financial reporting? Governments and not-for-profits provide go that are targeted to groups of constituents who advocate a political or social cause or who carry tabu research or other activities for the betterment of society. The objectives of governments and not-for-profits cannot generally e expressed in dollars and cents and are ofttimes ambiguous. Government and not-for-profit have relationships (unlike with a business) with the parties providing their resources.2. why is the budget a far more(prenominal) important inscription in both governments and not-for-profits than it is in businesses? Revenues and expenditures are controlled or strongly influenced through the budgetary process.3. What is meant by interperiod virtue? What is its consequences for financial reporting? The term interperiod equity is the concept tha t emphasizes that entities should not transfer costs eve to early years, let alone future generations. 4. Why may the matching concept be less applicable for governments and not-for-profits than it is for businesses? 5. What is the significance for financial reporting of the many restrictions that are placed upon a governments resources?6. Why is it difficult to develop accounting principles that are appropriate for governments within the same category and even more difficult to develop them for governments within different categories? 7. What is the significance for financial reporting of a governments power to tax? How does it affect the governments overall financial strength? 8. Why has it turn up especially difficult to establish accounting principles that enable governments to satisfy all three elements of GASBs prototypal objective of financial reporting in a single statement of revenue and expenditures or end sheet?