What types of business type activities do governments and not-for-profits provide? What kinds of goods and services do governments provide that resemble business-type activities? Why do governments provide these types of goods and services? What are the unique issues (if any) in accounting for these activities?
Governments and Non-profit organisation generally provides business for the welfare of society at large. Here the motive is not to earn profit but overall welfare of society and nation at large.
Railways is one such best example which is a business owned and run by Goverment (in most countries). Here the motive is to provide transport facility for the people of a country. Also no profit motive is involved in this business. Government charges to travellers only to cover expenses incurred for running railways.
Various benefits that accrue to society or nation from such non-profit motive business :
1. Employment opportunities increases manifold times.
2. People are not exploitated for a sake of profit making.
3. It is of great help for low income earning group as services or goods available are very cheap which can be affordable to them thus enhancing their life quality.
4. it boosts overall economy of a nation. Employment would increase income which in turn will convert to increase in demand which will boost more production which will increase GDP of a nation.
5. It will check inflation as such business boosts equality in a ratio of demand and supply.
Thus, there are many benefits attached to non-profit making businesses.
It has different set of standards for accounting. Although principles remain same but way of presentation differs from another normal business.