GAAP (Generally Accepted Accounting Principles)

Generally Accepted Accounting Principles (GAAP) are a set of standardized guidelines and rules that govern the accounting practices used by businesses in the United States. They ensure consistency, transparency, and accuracy in financial reporting, making it easier for investors, regulators, and stakeholders to understand a company’s financial health. GAAP covers various aspects of financial statements, such as revenue recognition, expense classification, and balance sheet presentation. By adhering to GAAP, businesses can provide reliable financial information, which enhances trust and comparability across different companies in the industry.