INTRODUCTION

From the dawn of businesses, their foremost aim has been to provide a range of goods

and services in order to earn profits; however, there have been establishments with the aims of

the welfare of the general public and seeing that goods/services are carried out to them in a

matter that is not profit oriented. These two very different yet similar organizations are that of

profit oriented businesses (POs) and non-profit organizations (NPOs). In each economic system,

even the theoretical ones, these two organizations form the fabric of society. They are the

driving force in the economy and the means by which the economy can excel to achieve

economic development and in extension economic growth.

The role of accounting is to provide the relevant, reliable, comparable, and consistent

information that is needed for sound economic decision making. Specifically the main purpose of

financial accounting is to prepare financial reports that provide information about a firm's

performance to external parties such as investors, creditors, and tax authorities. Managerial

accounting contrasts with financial accounting in that managerial accounting is for internal

decision making and does not have to follow any rules issued by standard-setting bodies.

The two very different and separate entities of POs and NPOs despite their differences

they still have similar traits.

This internal assessment seeks to identify, analyze, summarize and conclude the various

financial accounting methods used by both profit in comparison to non-profit organizations; their

similarities and their differences alike.