Question

Distinguish between profit and not-for-profit organisation.

Answer 1

Basis of Difference	Non-Profit Organisation	Profit Organisation
Meaning	They did not do their work for earning profit rather than their main objective is to do work to achieve a specific goal for the welfare of society or its members.	A profit Organisation is that Organisation that exists to make a profit for its owner(s)
Main Objective	To serve society for a better future.	To earn more profit to run the business because profit is the fuel of every business.
Source of Revenue	The main source of revenue for the NPO is Donations, grants, Membership fee, and entrance fee	The main source of revenue for the Profit Organisation is the amount received from selling its products and services.
Financial Statement	Financial Statements included the following statements 1. Receipts and payment A/c 2. Income and Expenditure A/c 3. Balance Sheet	Financial Statements included the following statements 1. Trading A/c 2. Profit/Loss A/c or Income statement 3. Balance Sheet 4. Cash flow Statement
Managed By	This type of business is managed by its trustees, committees, or anyone person authorized by the whole members.	It includes mainly three types of business. So it is managed as per the type of business: – 1. Sole Proprietorship – Managed by its Owner 2. Partnerships – Managed by its partners 3. Companies – Managed by its Directors
Funded From	It is started with funding received from donations.	It is started with initial capital investment by its owner(s).