The major reason for the existence of generally accepted accounting principles is to:
A) force accountants to all act in the same way.
B) increase business profits.
C) improve the standard of accounting information for decision-making.
D) make accountants legally liable for errors.

Question

Quizplus · Accepted Answer

Generally accepted accounting principles are established to improve the standard of accounting information for decision-making, providing a common set of guidelines to ensure consistent reporting and recording of financial transactions which can be used to make informed business decisions. While GAAP does help to ensure accountability among accountants, its primary purpose is not to make accountants legally liable for errors. While GAAP may indirectly contribute to business profits by promoting transparency and accuracy in financial reporting, this is not its main objective. Finally, while GAAP does promote consistency and standardization among accountants, its primary purpose is to improve the quality of accounting information, not to force accountants to all act in the same way.

The Major Reason for the Existence of Generally Accepted Accounting