The generally accepted accounting principles (GAAP) are:
A) rules that outline how a firm can operate ethically.
B) rules on how the firm will be valued in the event of a merger.
C) rules and procedures that define how companies are to maintain financial records and prepare financial statements.
D) rules for how a company can issue stock to raise money.

Question

Quizplus · Accepted Answer

GAAP are a set of guidelines and procedures that dictate how companies must maintain their financial records and prepare financial statements. These guidelines ensure consistency and accuracy in financial reporting, as well as providing transparency and accountability to investors and other stakeholders. Options A, B, and D are not accurate descriptions of GAAP.

The Generally Accepted Accounting Principles (GAAP) Are