Institutional Accounting is primarily used for which entities?

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Institutional accounting centers on accountability for resources in organizations that don’t aim to earn profits. It tracks donations, grants, endowments, and program-related spending, often using fund accounting to keep restricted funds separate from unrestricted ones. This approach helps donors and funders see exactly how their contributions are used and ensures resources are allocated to specific programs or purposes. Non-profit entities including NGOs rely on this framework to report stewardship and program outcomes, rather than focusing on profitability. In contrast, for-profit corporations report to investors with a focus on earnings, government agencies use public-sector budgeting and control, and individual investors aren’t the primary audience for this type of reporting.