What is the purpose of GAAP?

Question

Quizplus · Accepted Answer

The purpose of GAAP (Generally Accepted Accounting Principles) is to ensure uniformity in financial reporting, which allows for comparability between different companies and industries. This is important for investors, creditors, and other stakeholders so they can make informed decisions based on accurate and consistent financial information. GAAP also provides guidelines for financial reporting to ensure that financial statements are transparent, complete, and accurate. GAAP is not focused on increasing profits or reducing expenses, nor does it provide flexibility in financial reporting.

What Is the Purpose of GAAP