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Goodwill Industries is a major charitable organization that relies primarily on financial and nonfinancial donations and grants. It has retail operations that help sustain its financial operations so as to fulfill its mission to help train, support, and employ disadvantaged individuals and those with disabilities.

The video introduces the accounting function and the specific steps involved in the accounting cycle. The similarities and differences between for$-$profit and not$-$for$-$profit entities are discussed in detail. The importance of accounting in providing financial information and analysis is featured. Emphasis is placed on financial statements as well as ratio analysis in helping gauge the financial health of the organization.

Accounting is crucial for all organizations, whether they are a small business, large corporation, or a governmental or not$-$for$-$profit organization. The different types of accounting are discussed, including managerial, financial, tax, auditing, governmental, and not$-$forprofit. Balance sheets, income statements, and statements of cash flows provide important information for managers and others in the organization, helping demonstrate whether the organization is on budget or whether there are variances between projected and actual revenues. Costs and expenses have to be kept in line and are carefully monitored and analyzed by the accounting function.

Sufficient cash flow is critical to the sustainability of any organization, particularly the not$-$for$-$profit organization; in this case, Goodwill. Not$-$for$-$profit organizations utilize performance ratio analysis to gauge their overall financial performance. The results of these analyses help management assess the organization's performance against its plan or budget. They also help develop strategic plans for the future as well as benchmark against other similar companies.

What's the difference between assets and liabilities? Which of the key financial statements features these categories prominently?

Identify the six steps in the accounting cycle.

What are the key reasons that firms do ratio analysis?

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