Week 2 Discussion

Rank the financial statements (Statement of Activities, Statement of Financial Position, Statement of Cash Flows, and Statement of Functional Expenses) in order of benefit to an administrator. Explain your reason for the order.

Article

• Nonprofit Accounting (Links to an external site.) – Review parts 2, 3, and 4 of the Accounting Coach Nonprofit Accounting Explanation.

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• Week 2 PowerPoint Presentation

Answer preview

The statement of Cash Flows has the highest degree of benefit to the administrator of a non-profit firm. Although the cash flow statement is difficult to prepare, it is an essential financial statement that must be read by the management (Ittelson, 2017). This report is valuable to the administrators because it solely presents the cash inflows and outflows in the non-profit institution. This statement is essential to managers since it provides a more accurate view of the company’s flow of cash, unlike the report of activities. Besides, the managers must represent the values of their organization by analyzing the net cash from investing, financing, and operating activities. It is vital for a non-profit to understand each of their expenses based on their specified sections in the business operations to meet societal needs.(498 words)