What does GAAP stand for in accounting?

GAAP stands for Generally Accepted Accounting Principles. This term refers to the framework of accounting standards, principles, and procedures that companies in the United States must adhere to when preparing their financial statements. These guidelines are established by authoritative organizations, such as the Financial Accounting Standards Board (FASB), and are designed to ensure consistency, transparency, and comparability of financial reporting across different companies and industries.

By adhering to GAAP, companies provide a clear and comprehensive view of their financial performance and position, which is vital for investors, regulators, and other stakeholders who rely on this information for decision-making. The use of GAAP helps to enhance the credibility of financial statements, thus fostering trust in the financial markets.

Other options denote terms that either do not exist or are not recognized accounting frameworks, which makes them unsuitable choices for defining GAAP. Hence, it is clear that B is the correct interpretation of GAAP in the context of accounting.