Generally accepted accounting principles are
A) income tax regulations of the Internal Revenue Service.
B) standards that indicate how to report economic events.
C) theories that are based on physical laws of the universe.
D) principles that have been proven correct by academic researchers.

Question

Quizplus · Accepted Answer

Generally accepted accounting principles (GAAP) are standards that indicate how to report economic events in financial statements. These principles are developed by various accounting organizations such as the Financial Accounting Standards Board (FASB) and are used by companies to ensure consistency and comparability in financial reporting. They are not income tax regulations, physical laws, or theories proven by academic researchers.

Generally Accepted Accounting Principles Are