Question

Explain the nature and scope of application of GAAP (Generally
Accepted Accounting Policies).
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Answer 1

Explanation:

Generally accepted accounting principles (GAAP) refer to a common set of accounting principles, standards, and procedures issued by the Financial Accounting Standards Board (FASB). ... GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information.

Answer 2

Answer:

Nature of General Accepted Accounting Principles

Nature of General Accepted Accounting PrinciplesNature and Purpose of GAAPThe nature of General Accepted Accounting Principles is to ensure that the fundamental rules and accounting principles should be followed by the company businesses throughout the accounting period while preparing their financial statements. General Accepted Accounting Principles sets the standards for financial reporting of the company businesses. Accounting Principles that include Accounting Concepts and Accounting Conventions are used while preparing the Financial Statements.

Scope of General Accepted Accounting Principles

The Accounting Standards by their very nature cannot and do not override the local regulations which govern the preparation and presentation of financial statements in our country.

The Accounting Standards are intended to apply only to items which are material.