Generally accepted accounting principles

Question

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Generally accepted accounting principles (GAAP) are a set of standards and guidelines for financial accounting that are followed by companies when preparing their financial statements. Adhering to GAAP helps increase the level of credibility in financial statements and promotes consistency and comparability in financial reporting. GAAP is not a law created by Congress nor is it created by the Securities and Exchange Commission. While GAAP does provide guidelines for internal management reporting, its main purpose is to provide external financial reporting standards.

Generally Accepted Accounting Principles