What is the main reason that it is necessary for public companies to follow the rules and format set out in the Generally Accepted Accounting Principles (GAAP) when creating financial statements?
A) It ensures that the market value of assets and debt are reported accurately.
B) It ensures that information on the performance of public companies is reported on cash-basis accounting.
C) It ensures that important budgetary information is not omitted.
D) It makes it easier to compare the financial results of different firms.

Question

Quizplus · Accepted Answer

Following GAAP makes it easier to compare the financial results of different firms as they all use the same rules and format, allowing for more accurate analysis and decision-making.

What Is the Main Reason That It Is Necessary for Public