Financial accounting standards are known collectively as GAAP. What does that acronym stand for?

• A. Generally Accepted Accounting Principles
• B. Global Accounting and Auditing Practices
• C. Governmental Accounting and Auditing Policies
• D. General Agreement on Accounting Procedures

Answer: (A)

Verified step by step guidance

1. Understand that GAAP is an acronym used in Financial Accounting to refer to a set of standards and principles.
2. GAAP stands for 'Generally Accepted Accounting Principles,' which are the rules and guidelines that govern financial reporting and accounting practices.
3. These principles ensure consistency, reliability, and comparability of financial statements across different organizations.
4. The other options provided in the question, such as 'Global Accounting and Auditing Practices,' 'Governmental Accounting and Auditing Policies,' and 'General Agreement on Accounting Procedures,' are incorrect as they do not represent the established meaning of GAAP.
5. Remember that GAAP is widely used in the United States and serves as the foundation for preparing financial statements in accordance with standardized practices.