Generally Accepted Accounting Principles $($GAAP$)$ are a set of standardized accounting principles, standards, and procedures that are widely accepted and adopted for financial reporting in the United States. GAAP provides a framework for recording, summarizing, and reporting financial information in a consistent and comparable manner, enabling investors, creditors, and other stakeholders to make informed decisions. The Financial Accounting Standards Board $($FASB$)$ is the primary body responsible for establishing and updating GAAP in the U$.$S$.$

$**$Key Aspects of GAAP:$**$

$1.**$Consistency:$**$ GAAP promotes consistency in financial reporting by establishing uniform standards and guidelines for recording transactions, preparing financial statements, and disclosing information. Consistent application of GAAP ensures comparability between different entities' financial statements and facilitates analysis and interpretation by users.

$2.**$Relevance and Reliability:$**$ Financial information prepared in accordance with GAAP must be relevant and reliable. Relevant information is timely, predictive, and helps users make decisions, while reliable information is verifiable, faithful, and free from bias or material error.

$3.**$Prudence:$**$ GAAP encourages the use of prudence or conservatism in financial reporting, which involves exercising caution when making estimates and recognizing uncertainties. Prudent judgment ensures that financial statements reflect a realistic assessment of the entity's financial position and performance.

$4.**$Full Disclosure:$**$ GAAP requires entities to provide full and transparent disclosure of all relevant information that may impact users' understanding of the financial statements. This includes notes to the financial statements, supplementary schedules, and other disclosures that provide additional context and detail.

$5.**$Going Concern Assumption:$**$ GAAP assumes that the entity will continue to operate in the foreseeable future, allowing financial statements to be prepared on a going concern basis. This assumption influences the measurement and presentation of assets, liabilities, and equity, assuming they will be realized or settled in the normal course of business.

$**$Objective Question:$**$

Which organization is primarily responsible for establishing and updating Generally Accepted Accounting Principles $($GAAP$)$ in the United States?

A$)$ International Accounting Standards Board $($IASB$)$ 

B$)$ Financial Accounting Standards Board $($FASB$)$ 

C$)$ Securities and Exchange Commission $($SEC$)$ 

D$)$ American Institute of Certified Public Accountants $($AICPA$)$

Answer rating: 100% (QA)

ANSWER The correct answer is B Financial Accounting Standards Board FASB The Financial Accounting St... View the full answer