Generally Accepted Accounting Principles (GAAP)

Generally Accepted Accounting Principles (GAAP) are a set of standardized guidelines and rules for financial reporting and accounting in the United States. They ensure consistency, transparency, and accuracy in financial statements, making it easier for investors, regulators, and other stakeholders to understand and compare a company's financial health. GAAP covers various aspects, including how to recognize revenue, measure assets, and report expenses. By following these principles, companies provide reliable information that helps in informed decision-making and promotes trust in the financial system.