09/08/2023
Generally Accepted Accounting Principle (GAAP) is the standard set of rules that we use in accounting. It dictate everything we do in accounting. It is also the theory behind why we do transactions the way we do.
We do GAAP because it ensures that all our accounting information is accurate, that it is consistent, consistent within the same company from month to month, year to year. It also consistent between two company, because how do you determine which company you want to invest in, if there are using different Accounting practices. You would not be able to judge them appropriately. So everyone has to use the same set of rules.
In addition, it also ensures that all of our account information and transactions are free from bias.
IN MY NEXT POST WE WILL TALKING ABOUT PRINCIPLES OF GAAP...
