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"GAAP" stands for "Generally Accepted Accounting Principles." These are a set of accounting standards, principles, and procedures that are widely recognized and used by companies and organizations to prepare and present their financial statements. The purpose of GAAP is to ensure consistency, comparability, and transparency in financial reporting. By following GAAP, companies can provide users of their financial statements, such as investors, creditors, and regulators, with reliable and meaningful information about the organization's financial position, performance, and cash flows. GAAP is not a single set of rules, but rather a collection of principles and guidelines established by standard-setting bodies, such as the Financial Accounting Standards Board (FASB) in the United States and the International Accounting Standards Board (IASB) globally.
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