What does GAAP stand for?

GAAP stands for Generally Accepted Accounting Principles. This is a framework of accounting standards, principles, and procedures that companies follow when compiling their financial statements. GAAP is essential for ensuring consistency, transparency, and comparability of financial information across different organizations and industries.

The principles within GAAP provide guidelines on various aspects of financial reporting, including revenue recognition, balance sheet items, and the presentation of financial statements. By adhering to these standards, companies can provide a clear and standardized view of their financial position and performance, which is crucial for investors, regulators, and other stakeholders who rely on this information for decision-making.

The other options represent terms that do not accurately reflect the accepted standards and practices used in accounting today. They may contain elements related to auditing or governmental accounting but do not capture the essence of the established accounting principles that ensure uniformity in financial reporting.