PART 1

Prior to beginning work on this discussion forum, read the article Cracking the Nonprofit Accounting Code.

Based on the information presented in the article, discuss:

• How and why does the accounting system used by governmental/nonprofit entities differ from the system used by for-profit entities?
• How does the annual financial report of a governmental/nonprofit entity differ from the report of a for-profit entity?
• The user of a for-profit financial report is usually interested in the bottom line, net income. What are some top interests of the user of the financial reports of a governmental/nonprofit entity?

PART 2

State or local government entities can engage in governmental activities as well as business-type activities. Provide two examples of each activity type. Discuss how and why accounting and financial reporting differs between the two types.