GAAP is concerned with making sure that financial reports are:

• A. consistent, comparable, and reliable
• B. prepared only for tax purposes
• C. based solely on management's discretion
• D. focused exclusively on future projections

Answer: (A)

Verified step by step guidance

1. Understand the purpose of GAAP (Generally Accepted Accounting Principles): GAAP is a set of accounting standards designed to ensure that financial reporting is transparent, consistent, and reliable across organizations.
2. Analyze the options provided in the question: The correct answer should align with the principles of GAAP, which emphasize consistency, comparability, and reliability in financial reporting.
3. Eliminate incorrect options: For example, 'prepared only for tax purposes' is incorrect because GAAP is not solely focused on tax reporting; it applies to all financial reporting. Similarly, 'based solely on management's discretion' is incorrect because GAAP requires adherence to standardized rules, not subjective discretion.
4. Consider the role of future projections: GAAP focuses on historical and current financial data rather than exclusively on future projections, making 'focused exclusively on future projections' an incorrect option.
5. Select the correct answer: The correct answer is 'consistent, comparable, and reliable,' as these are the core principles that GAAP aims to uphold in financial reporting.