What does GAAP stand for?

GAAP stands for Generally Accepted Accounting Principles. This term refers to a set of rules and standards used in the United States for financial reporting and accounting. GAAP provides a framework for consistency and transparency in the preparation of financial statements, ensuring that organizations present their financial information in a way that is understandable and comparable across different entities. This is crucial for investors, regulators, and other stakeholders who rely on financial statements to make informed decisions.

By adhering to GAAP, companies can enhance the credibility of their financial reporting, which is vital for maintaining public trust and enabling effective capital markets. Each aspect of GAAP covers specific accounting issues, such as revenue recognition, balance sheet classification, and materiality, providing a guideline that helps ensure that financial statements present a true and fair view of a company's financial performance and position.

The other choices represent terms that do not accurately reflect the meaning or focus of GAAP, which is specifically about accepted principles in accounting practices in the U.S.