Explanation: A non-profit organization provides goods or services for a social cause to benefit the public. Rather than distributing extra revenue to members or shareholders, the extra income is used to further achieve its goals. Most non-profit organizations are tax exempt.
Suppose that a large tree on Betty's property is blocking Chuck's view of the lake below. Betty accepts Chuck's offer to pay Betty $100 for the right to cut down the tree. This situation describes the Coase theorem.
The income statement shows a detailed picture of the transactions of all revenue and expenses. The income summary account then summarizes these figures in order to produce the statement of retained earnings. Both the income statement and income summary show the revenue and expenses of a company.