Comparing For Profit and Non for Profit Colleges Essay

Colleges and university contain slowly stupefy one of the stepping stones into the holding universe today. People go to colleges for higher culture with the intention of earning degrees in which they chamberpot design in their respective fields. Some example degrees that people abide by atomic number 18 Medical, Law, Business, Accounting, and Science Degrees. Through the years the sen seasonnt of college was that it was optional and it was a door for better life and job. However in the modern times, it be go into a necessity. It all started when the colleges once single- g displaceer institutions tar derive special(prenominal) school-age childs in their respective demographics.Today, the college merchandise has now been divided into devil major categories Not-for-Profit Colleges and For-Profit colleges. Not-For-Profit Colleges ar institutions that are interested in serving the pupils needs by providing necessary culture to the student. The Not-For-Profit organizat ion are tax loose and have a board of trustees that makes decisions. For-Profit Colleges are run like a business in which their goal is to generate income for their owners and shareholders. on that point are no board of trustees at For-Profit College and the owner and shareholders control the decision on which is crush for the institution.Although the objective for both Not-for-Profit Colleges and For-Profit College is to admit their students an education in which they shadow use for their future, both institution have great differences in which their organizations are run. Although the autochthonic objective For-Profit colleges is to provide an education, they are merely a business in which their goal is to earn a profit. Like both business, the For-Profit Colleges can be apparatus as a sole proprietorship, partnership, or even a subsidiary of a larger company.The For-Profit College can withal be setup as a corporation that have stocks traded on the stock markets. They en trust try to bring earnings and a return on investment funds for all their shareholders and investors. They can have great flexibility because at the end of the day, the goal for the For-Profit College is to make money and only that. The instructors that are hired at For-Profit Colleges usually have a really different approach to their te nett compared to Non-For-Profit Colleges. Usually they are merely there to carry out the lesson casts in which was intentional by the institution.Majority of the lesson plan wedded to each student is standard which means the instructors do not have the liberty to deliver the slap-ups their own curriculum or lesson plans. This is similarly due to the purpose of the education effrontery is to assist the student in getting precise jobs with specific job services. The courses at the For-Profit college is to help the students get better jobs in the market while the courses at Not-For-Profit College intend to allow the student learn and re verse within their respective fields.Students that enter For-Profit colleges already have a plan in terms of type of jobs they would like to pursue and they enroll in the necessary courses while some students at Not-For-Profit College have no idea which career that they would like to pursue. Not-For-Profit college help you learn and gain the knowledge in the field that youre interested in while For-Profit colleges prepare you for the specific job that you fate to do. The admission cognitive process for For-Profit schools are not as selective as the one in Not-For-Profit College.There isnt very much prior evaluation of the student since their important goal is to make a profit. They tend to be more flexible in terms of their requirements and petition to students of all ages and races. Modern day classes can be taken online and at more convenient times such(prenominal) as nights and weekends to accommodate students that work full time. Online has excessively been the saucy tren d because of the lower overhead be for the For-Profit institution. For-Profit institutions tend to not have a campus like the Not-For-Profit colleges do. For-Profit colleges classes is usually at their own building or leased space.There isnt any usefulnesss such as on-campus food or housing that is open to the students at For-Profit institutions. The college provides students with the education that they need for their desire jobs rather than a college jazz that a Not-For-Profit college can provide. For Profit institutions conduct their accounting the same as any regular business would do. Their main goal is to make a profit just like all businesses would do. For-Profit institutions must comply with the national Accounting Standard circuit card. The tuitions are preserve as revenue while the expenses include leases, staff, and keep expenses.For-Profit colleges budget system must include tools to annunciate budgets, manage variance and generate financial bailiwicks. The bud get forecast is designed to estimate revenue and expenses to its income center, administrative cost structure, and its academic schedule. The income center budget includes enrollments, revenue, and expenses by academic period. Administrative expenses include administrative costs per student and personnel pay ranges. The budget should also include financial report to show if the institution is profit satisfactory. Statements such as cash flow submitments, net income, and balance sheet should all be included.The budget must also be flexible enough in case that their projections arent accurate. They should be easily accessible so that managers can routinely check if their process is above, below, or even on target. To determine if the institution is on down the stairswrite with its budget and strategic plans, they would measure their six categories in their budget to get a better picture of the institutions performance. They are new students, enrollment, cost performance, revenue, net income, and cash flow. This way they would also be capable to measure the cleverness of their institution also.The goal for Not-For-Profit Colleges is to provide students with higher education and help them advance in a particular field. Not-For-Profit Colleges are tralatitious college such as community colleges, state universities, and liberal arts colleges. These institutions gain funding to provide their operate from the government subsidy, tuition fees, and donations. All the income that are received is strictly used for institution purposes. Some examples are professors, staff, maintenance, utilities, or even computers that the school needs and student needs.All the money is given back to the institution in some way. The professors hired at a Not-For-Profit College design their own courses and create their own course curriculum and lesson plan. They can provide the education in their courses with their own individual styles and lesson plans. The professors are under the guidance of the Board of Trustees, which is composed of different representatives that make decisions for the college. Not-For-Profit colleges are in the main to provide education for the student who are enrolled in their institution.The classes are usually on a campus in which the student spends a majority of their time at. The board of Trustees focuses on improving their campus for the student. The Board of Trustees is constantly making decisions from an academic, campus, and efficiency perspective in order to provide the best possible service for their students. Not-For-Profit Colleges select their students through a vigorous and selective process. Students usually impart interest in attending the college and bygone the college decides if the student would be a good fit for the college.After being accepted, the student would be able to earn a encyclopaedism to help with the room and board that the college charges. Not-For-Profit Colleges are selective of the students since t hey strive to serve students who would fit the reputation of the institution. This selective process allow college to focus on the needs of the students that are a good match for the college. From an accounting perspective Not-For-Profit colleges follow the rules of Governmental Accounting Standards Board who is responsible for Generally Accepted Accounting Principles used by the fall in States.The Governmental Accounting Standards Board issues statements that deal with the accounting principles and financial describe rules of government and other Not-For-Profit organizations. Like all Not-For-Profit organization, these college contribute without expecting commensurate returns. Their main purpose is to provide education to the students that enroll in their school. Most of their income for these colleges come from the tuitions and fees they receive from their student. Other income comes from donation and government subsidies.When a Not-For-Profit College receives tuition payments a nd fees in full from students the college is supposed to record it at a gross amount, as any revenue would be save. If a student meets certain measuring stick that allows them to attend a publicly funded not-for-profit institution, tuition may be waived in the form of a tuition waiver. Tuition Waivers are reported as a contra-revenue account reducing the revenue account. If the college has any debts, they are recorded just as businesses record them as the debts are recorded with institutional support expenses.Students may pay for college with scholarships which are essentially amounts contributed for the education of a selected individual. Scholarships are given for a range of reasons including high academic standing, rank and file in certain societies, or awards. However there are two main sources of scholarships which are an outside donor or the scholarship is awarded by the college itself. If the scholarship is from an outside donor the not-for-profit college simply collects t he amount receivable from the donor.If the scholarship is awarded by the college itself the accountant reduces the colleges accounts receivable. This reduction in the accounts receivable is recorded as an expense to education and worldwide student aid. Certain expenses of a not-for-profit college are unrestricted net assets classified as instruction expense, question expense, public service expense, academic support, student run, institutional support, operation and maintenance of plant and student aid. Not-For-Profit Colleges cannot operate on tuition fees alone as all the money is immediately put into the school.Fortunately as a Not-For-Profit organization these colleges may receive governmental subsidies as support revenue. There are two types of government subsidies classified as unrestricted and restricted. unrestricted subsidies are intend for the college to use in general operations. The Board of Trustees also has the power to decide whether a subsidy is unrestricted. Res tricted subsidies can be split into both temporarily or eonianly. These subsidies often are given for a certain purpose such as an expansion or special project.The restrictions on these subsidies refer to the amount that can be fagged and when it can be spent. Sometimes the government may also provide students with grants, which are similar to scholarships in the sense that they are provided to help students elapse their financial needs for school. Government grants can both be state or federal and come from government programs such as Pell or the Federal Supplemental Education Opportunity Grant. Similar to scholarships the college may either distribute the cash to the proper students or receive the amount that is to be distributed.If the college decides to receive the grant then it is recorded as a liability in the Grant Funds Held for Students account. Not-For-Profit colleges usually also have an giving fund which is used to help finance the operating expenses of the organiz ation. Aside from the general endowment the institution may also have restricted endowments intended for specific purposes such as professorships, scholarships or fellowships. For cash received from permanent endowments it is recorded as a contribution and the income is restricted to student aid. both income received due to an endowment is temporarily restricted and the cash is meant to be spent on student aid. The other services that a Not-For-Profit College provides are the Auxiliary Services. The Auxiliary Services are the services and amenities of the campus. Examples of such services are residence halls, food services and the college athletic teams. These services are classified under unrestricted revenues and expenses. The total of the accounts from the auxiliary services are reported on the Statement of Activities for the College and subsidiary records are also kept.The Statement of Activities for the Not-For-Profit College will usually list the Revenues combined with Total bread Assets Released from Restrictions for Operations to get the Total Revenues and Reclassifications. The next sectionalization is usually the Expenses section followed by any Net Change in Unrestricted Assets, temporarily Restricted Assets and finally Permanently Restricted Net Assets. The Statement of Activities is then followed by a summary on the Change in Assets for the past year. Even though the main purpose of both For-Profit and Not-For-Profit is the same, the way that they function arent necessary the same.The accounting standards and rules that they follow both are very different. Also the rules that both colleges follow are extremely different. Both colleges have their strength and weaknesses in their way that they serve their students. The student should chose the type of college they want depending on what their needs are. If the student is looking to advance their education they should be looking for a traditional Not-For-Profit College. If they are trying to land a job that has technical skills which are required, then the For-Profit College is a better option.