GAAP requires the use of accrual-basis accounting.

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GAAP (Generally Accepted Accounting Principles) require the use of accrual-basis accounting, which means that revenue is recognized when earned and expenses are recognized when incurred, regardless of when payment is received or made. This method provides a more accurate representation of a company's financial performance and position. Other accounting methods, such as cash-basis accounting, do not comply with GAAP.

GAAP Requires the Use of Accrual-Basis Accounting