Generally accepted accounting principles are
A) not used in the real world
B) are required to make financial statement information relevant and faithfully represented
C) are only used for internal reporting
D) are only used by auditors
E) are only used for reporting to Canada Revenue Agency

Question

Quizplus · Accepted Answer

Generally accepted accounting principles, or GAAP, are widely recognized guidelines for financial accounting that are used to make financial statement information relevant and faithfully represented. They are important for external reporting to stakeholders, such as investors and creditors, and are required by regulatory bodies such as the Securities and Exchange Commission (SEC) in the United States. GAAP is also used for internal reporting to help businesses make informed decisions based on accurate financial information. They are not just used by auditors, but by all involved in financial reporting. They are also not limited to reporting to the Canada Revenue Agency, but are used globally.

Generally Accepted Accounting Principles Are