What does GAAP stand for?

GAAP stands for Generally Accepted Accounting Principles. This set of guidelines is essential for financial reporting and ensures that financial statements are consistent, reliable, and comparable across different organizations. These principles provide a framework for preparing financial statements, including recognition, measurement, presentation, and disclosure of transactions.

Using GAAP helps maintain transparency in financial reporting, which is crucial for investors, regulators, and other stakeholders who rely on accurate financial information to make informed decisions. Adhering to GAAP standards helps to uphold the integrity of the accounting profession and the relevance of financial reports in representing an organization's financial position and performance.