B. Explain how the analysis of nonprofit and governmental financial statements differs from analysis of traditional financial statements. Provide examples to support your response.
C. Compose example financial statements for your company as a nonprofit entity and as a governmental entity. Ensure all information is entered accurately and the statements are compliant with GAS.
Answer preview
As defined by the GASB the compliance for the financial statements for the GAS is for audit purposes and therefore the management needs to put into considerations that there are no misquotes that may arise or misrepresentation of entries or errors in them. The entries will be clearly defined as evidenced in the transaction documents such as the expenditure vouchers. This means that the compliance is on the management to thus ensure that are the entries in the Budget and in the Cash flows are entered correctly with no room for misquoting and misrepresentation of entries.
The difference in Analysis of Nonprofit and governmental Financial Statements to Traditional Financial statements
The analysis of the financial statements for the Nonprofit and governmental entities is guided by the financial trends which show how the entities receive and spend the finances as well as the opportunities and challenges that occurred during the financial period such as a reduced grant, increased donations (Prentice, 2016). This means that the aim of the analysis is to focus on the sources of finances as well as the priorities set for expenditures for the finances
