Accounting for nonprofit organizations: a case study of British Red Cross

Abstract

Accounting for Nonprofit organizations (NPOs) has become an interesting and promising topic, which is different from commercial accounting in many ways: The objective of NPOs is to provide services for public benefits, not to generate profits for partners or shareholders. Since their expenditures must be covered by revenues, which are financed by grants or donations, not market transactions, NPOs is money focused, while commercial organizations are profit focused. A case study of British Red Cross (BRC) is undertaken by analyzing its bookkeeping and financial statements, the problems and suggestions could be helpful to improve the financial reports of the other NPOs. Key words: NPOs, BRC, money focus, profit focus, bookkeeping, financial reports, fund accounting.