GAAP is a set of rules used for helping publicly-traded companies create their financial statements. 

Per generally accepted accounting principles (GAAP), companies are responsible for providing reports on their cash flows, profit-making operations, and overall financial conditions. It is mainly used for businesses to organize and summarize the financial information into accounting records. GAAP guidelines require businesses to prepare financial statements according to the matching principle using the accrual basis of accounting. Because the objective is to ensure that expenses match with revenues, expenses are reported in the period in which the expense is incurred regardless of when the expense is paid.