Navigation » List of Schools, Subjects, and Courses » Accounting 180 – Financial Analysis and Computations » Discussions » Discussion: Week 1 – Generally Accepted Accounting Principles (GAAP) » Discussion: Week 1 – Generally Accepted Accounting Principles (GAAP) Sample Answers
Discussion: Week 1 – Generally Accepted Accounting Principles (GAAP)
A friend of yours sent an e-mail asking about the generally accepted accounting principles (GAAP). It seems she was browsing through a recent annual report and saw an auditor opinion saying that the financial statements were prepared in conformity with accounting principles generally accepted in the United States of America. She asks you what the generally accepted accounting principles are. Click on the three dots to the right of the discussion to review the rubric.
Discussion: Week 1 – Generally Accepted Accounting Principles (GAAP) Answer
The main purpose of generally accepted accounting principles (GAAP) is to standardize the process of recording and publishing business transactions and relevant information that aid the users in sound decision-making. It means that the credibility of the financial statements lies in meeting the GAAP principles. GAAP ensures that the financial statements are useful, have confirmatory and predictive values, material, presented faithfully, comparable, verifiable, timely, and understandable.