Nonprofit Accounting

Nonprofit accounting is the process of tracking and managing the financial activities of organizations that operate for a charitable purpose rather than for profit. It focuses on ensuring transparency, accountability, and compliance with regulations. Unlike for-profit entities, nonprofits report their finances to show how they use funds to achieve their mission, relying on donations, grants, and fundraising. Key documents include the statement of activities, statement of financial position, and cash flow statement, which help stakeholders understand the organization's financial health, sustainability, and impact on the community.