Question

Sometimes, the amount reported as revenues/expenses for the same programs on the statement activities are not...

Sometimes, the amount reported as revenues/expenses for the same programs on the statement activities are not compatible with those on the statement of revenues, expenditures, and changes in fund balances. Can you provide at least one reasonable explanation for the difference? (Approx. 200 words)

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Answer #1

The objective of statement of activity and statement of revenue varies and that is the primary cause because of which such issue may occur. Statement of activity is generally details of facts and figures which are internal to the organization and they are used for maintaining and monitoring activities within the organization but the statement of revenue generally are statements for public display and such statements are generally not changed from what it is there in the statement of activities but in some instances organization may change certain data points because of various reasons and the primary reason is portraying the business in a different matter which may influence the reaction to some extent. This is generally unethical but there are instances when organizations may do such activities. For example the results of the quarter just before the annual hike may be a bit below expectation and this may done deliberately by organizations just to provide a lower rate of hike. These activities are unethical, unfair and should not be supported or encouraged because the impact is poor.

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