What does GAAP stand for?

What does GAAP stand for?

• A. Great American Accounting Procedures
• B. Generally Accepted Accounting Principles
• C. General Accepted Auditing Protocols
• D. Global Accounting and Practice Standards

Answer: (B)

GAAP stands for Generally Accepted Accounting Principles. This is the framework of rules and conventions used in the United States to prepare and present financial statements so they’re consistent and comparable across companies. The phrase signals that these principles are widely accepted by the profession and standard-setters, like the Financial Accounting Standards Board. GAAP covers how revenues are recognized, how assets and liabilities are valued, how expenses are matched to revenues, and what needs to be disclosed in financial reports. The other options use terms that aren’t the established expansion and don’t describe the U.S. accounting standards; they might imply auditing protocols or global standards rather than the formal set of accounting guidelines.

GAAP stands for Generally Accepted Accounting Principles. This is the framework of rules and conventions used in the United States to prepare and present financial statements so they’re consistent and comparable across companies. The phrase signals that these principles are widely accepted by the profession and standard-setters, like the Financial Accounting Standards Board. GAAP covers how revenues are recognized, how assets and liabilities are valued, how expenses are matched to revenues, and what needs to be disclosed in financial reports. The other options use terms that aren’t the established expansion and don’t describe the U.S. accounting standards; they might imply auditing protocols or global standards rather than the formal set of accounting guidelines.