How are expenses required to be shown/segregated on the financial statements of not-for-profits?...

Question:

How are expenses required to be shown/segregated on the financial statements of not-for-profits? Why is this distinction made?

Income Statement:

Income statement presents the company's revenue, costs, gross profit, selling and administrative expenses, other expenses and income, and taxes paid. Profit or loss or is calculated by adding up all revenues and subtracting all expenses.

Answer and Explanation:

Expenses being presented in the Income Statement for the Non Profit organization are shown depending on the major program activity, management, and fundraising. Meaning expenses is classified on a per activity or function to clearly demonstrates how the company spends its resources in accomplishing mission activities.


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How to Make an Income Statement: Example & Analysis

from Accounting 201: Intermediate Accounting I

Chapter 5 / Lesson 6
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