Case Study: Accounting Function at Goodwill Industries international Inc.
- What are some similarities between the type of accounting performed at Goodwill compared to accounting at for-profit companies?
The main similarity is that both tend to contribute towards the improvement of lives of different people and communities. Both Goodwill and for-profit companies have to provide the details of the donations that they get from different sources. Both of these companies have to present themselves for an audit. Both these companies provide details of their finances because fraud can happen at any one of them which is tried to be prevented with regular audits. The other similarity is that both types of companies have to pay salaries to their employees and are liable to pay utility bills as none is exempted from it.
- What are some differences between the type of accounting performed at Goodwill compared to accounting at for-profit companies?
The financial statements of both types of companies are known with different names. For profit organizations record their accounting details in balance sheets but the equivalent of a balance sheet for a goodwill organization is called statement of financial position. Both types of companies keep a track record of all the financial transaction in different types of financial statements. Goodwill companies, as they are non-profit, do not have does not have a shareholder’s equity in their statement of financial position.
- How can Goodwill use ratio analysis to improve its operations?
Goodwill can definitely utilize ration analysis to improve its operations. Ratio analysis can be used to know about the revenue it gets from the amount of money it spends on different activities. Ration analysis can also be used as an indicator of the financial position of the goodwill. Just like a for-profit organization, it is important for a goodwill to keep track of its financial standing and the rate of return of its spending of each dollar.