Generally Accepted Accounting Principles

Generally accepted accounting principles (GAAP) refer to a common set of accounting principles, standards, and procedures issued by the Financial Accounting Standards Board (FASB). GAAP helps govern the world of accounting according to general rules and guidelines. Every Public and private companies must follow GAAP when their accountants compile their financial statements. GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information. GAAP can help your company's financial status be better understood by investors and lenders and ensure that you are practicing the most acceptable and accurate accounting principles possible