Distinction between not for profit organization and profit earning organizations?
Answers
Answer:
Nonprofit Organizations are those organizations which are incorporated not for earning some income from its activities rather their primary motive is to enable activities which are generally for aiding or advancement of the society at large and are not required to pay taxes whereas For Profit Organizations are those entities which are incorporated with a primary objective of earning economic and monetary benefits either directly or aiding in that process.The for-profit organization is built to serve the business owners. The nonprofit organization is built to serve the society at large.Profit organizations can be in the form of a company or a sole proprietorship or partnership company. A nonprofit organization can be in the form of trust, clubs, society, committee, etc.Profit organizations make the profit by directly/indirectly selling goods or services. Nonprofit organizations can sell goods/services, but they mainly source revenue through donations, subscriptions, or membership fees.The financial statements prepared for-profit organizations are the income statement, the balance sheet, and the cash flow statement. The financial accounts prepared for nonprofit organizations are the receipts & payment account, the income & expenditure account, and the balance sheet.
Answer:
Non for profit organization the main objective is to serve society for a better future.
Profit organization main objective is to earn more profit to run the business because profit is the fuel of every business.