Generally Accepted Accounting Principles (GAAP) are the set of standards established to reflect the image of the company.
Thus, by the concept of generally accepted accounting principles, we interpret that all companies manage their own community rules and regulations on accounting to keep track of their assets. On the other hand, the General accounting plan along with the Commercial Code They are the two bodies in charge of regulating these accounting principles.
To specifically regulate each case, there are 5 most important generally accepted accounting principles:
- Accrual principle
- Principle of uniformity
- Principle of prudence
- Principle of no compensation
- Going concern principle