Running Head: NOT-FOR-PROFIT ACCOUNTING
Not-for- profit Accounting
Subject: Accounting Issues
The purpose of not for profit organisation is to address the needs of society.
Numerous accounting rules are applicable to non-profit entities. A critical look at the
financial statements makes one question whether the contributions help the beneficiaries or
they go into the pockets of the individuals who manage the charity (Prentice, 2016).
Ratios are practically meaningless as they do not give an accurate representation of
the financial status of an organisation. Overheads are a poor measure of a non-profit
organisation’s performance (Burks, 2015). Although overhead ratios provide insights into the
organisation’s performance, it does not guarantee charity accountability. To ensure charity
accountability, it is imperative to add other critical dimensions of finances.
From the analysis of the organisation, it seems that the organisation spends less on
overheads. Expenses enable a charity to be able to improve itself. High overhead costs mean
that the company makes investment decisions and uses expenses to achieve the same. Based
on the analysis...
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