Explain the Importance and Use of Generally Accepted Accounting Principles

question 185

Essay

Explain the importance and use of Generally Accepted Accounting Principles (GAAP).

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Definitions:

Fixed Asset

Long-term tangible property held for business use and not expected to be converted into cash in the current or upcoming fiscal year.

Normal Operations

Refers to the regular and routine activities of a business under usual conditions.

Long Lived

Assets or properties owned by a company that are expected to provide economic benefits or value over an extended period, often exceeding one year.

Tangible

Relating to or representing things that have physical form and substance; can be touched or felt.