Generally accepted accounting principles are intended to assist accountants in preparing financial statements that:
A) Are relevant, reliable, comparable, and understandable.
B) Show the business to be both solvent and profitable.
C) Comply with all income tax rules and regulations.
D) Are ideally suited to the specific needs of each user of the financial statements.

Question

Quizplus · Accepted Answer

Generally accepted accounting principles (GAAP) provide guidance and standards for financial reporting so that financial statements are relevant, reliable, comparable, and understandable to users of the statements. While GAAP compliance may also help show the business to be profitable and solvent to some extent, this is not the primary objective of GAAP. Additionally, compliance with GAAP does not necessarily mean compliance with all income tax rules and regulations, as these may differ from country to country. Finally, financial statements prepared according to GAAP are designed to be relevant and useful to a broad range of users, rather than tailored to the specific needs of individual users.

Generally Accepted Accounting Principles Are Intended to Assist Accountants in Preparing