What Is the Purpose of Generally Accepted Accounting Principles (GAAP)

question 33

Essay

What is the purpose of generally accepted accounting principles (GAAP)?

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Definitions:

Book Value

The net value of an asset reported on the balance sheet, calculated as the asset's cost minus accumulated depreciation.

Plant Asset

Long-term tangible assets used in the production of goods and services, such as machinery, buildings, and equipment.

Accumulated Depreciation

The total amount of an asset's cost that has been expensed since the asset was acquired and put into use.

Accumulated Depreciation

The total depreciation for a fixed asset that has been charged to expense since that asset was acquired and put into use.