Practice Quiz

CLEP Accounting

Category - Accounting

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GAAP refers to:
  1. A store that sells casual clothing
  2. General accounting assistance program
  3. Generally accepted accounting principles
  4. Generally acceptable account procedures
  5. The theory that accounting and the general public look at financial statements differently
Explanation
Answer - C - GAAP refers to generally accepted accounting principles and in the United States, GAAP is set by FASB-the Financial Accounting Standards Board.

Key Takeaway: Generally accepted accounting principles are the commonly-followed rules and standards that govern preparation, presentation, and reporting of financials in the accounting process. GAAP not only contains general commonly followed accounting rules, but industry-specific standards, as well.
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