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A non-profit is a company that for accounting purposes does not have shareholders and therefore keeps nothing in retained earnings at the end of the period. The
by sotix 2y ago
A non-profit is a company that for accounting purposes does not have shareholders and therefore keeps nothing in retained earnings at the end of the period. The leftover money must be distributed (e.g. as salaries, towards the stated mission, etc.). Their financial statements list net profit for the period and nothing is retained.
- matwood 2y agoThe money doesn't have to be used. Many non-profits have very large balance sheets of cash and cash equivalent assets. The money just won't be paid out as dividends to shareholders.
- sotix 2y agoCorrect. They carry a net assets balance at the end of the period. But they do not retain earnings because there are no shareholders to pay out.