Assignment Example | Topics and Well Written Essays - 500 words - 217

Assignment Example Issues arose when it came to the income statement. Although Gabel Boarding School not for profit organization meaning its primary organizational objective is not profit maximization, the school is heading towards the dark end. The financial statements indicate that the company spends more than it earns in one trading period. When there are many expenses that the income, the school generates the chances of the operations of the school getting paralyzed are very high. The financial statements of Gabel Boarding School also indicate that the biggest source of funds for the school loans from banks and other financial statements. Ideally not for profit organization do not get their revenues from their activities but donors and investors. Donors and investor are parties interested in the good will of the project. Loans tend to drain all the funds from the operations and the little income the school gets. Another issue with the financial statements of the school is that there are many miscellaneous expenses. The miscellaneous expenses generate not revenues for the school and thus act as a fiscal restraint. Not for profit organizations usually have their income statements include few details. They add up all items from their expenditures and record them as one item. Their statements have a particular audience who are the donor and investors. Because of the audience they attract they only list important activities of the organization, unlike Gabel Boarding School where all items are in the list (McCarthy, Nancy and John 132). The first recommendation that the school must work on immediately reduce their expense accounts. Reducing the expense account does not necessarily mean that the school stops carrying out its operations but instead either raise the revenues they have from other sources or get rid of activities that are no a must do. The best way to reduce expense from the organization’s activities is to have a checklist (McCarthy, Nancy and