Accounting for Different Firms

The most significant difference between nonprofit and for-profit organizations lies in the names of the different entities. In essence, the primary reason for business engagement for a for-profit organization is increasing the profits through a reduction in cost as much as possible, while at the same time increasing the revenue. On the other hand, the nonprofit organization only hopes to earn revenue above the cost amount, and as such sustain the activities of the organization in the long run. After all, if the costs would be higher, then it would be operating at a loss, which reduces the possible sustainability of the business in question.