Generally Accepted Accounting Principles

Generally Accepted Accounting Principles (GAAP) are a set of rules and standards used in the United States to ensure consistency and transparency in financial reporting. These principles guide how companies prepare their financial statements, ensuring that they provide a true and fair view of their financial position. GAAP encompasses principles related to revenue recognition, expense matching, and the valuation of assets and liabilities. By adhering to GAAP, organizations enhance the reliability of their financial information, making it easier for investors, regulators, and the public to understand and compare financial performance across businesses.