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How GAAP provide guidelines in preparation of Financial Statements? Explain with example.

How GAAP provide guidelines in preparation of Financial Statements? Explain with example.

by Md.Jahidur Rahman -
Number of replies: 0

GAAP guidelines demand businesses to prepare financial statements according to the matching principle using the absolute root of accounting. Because the motive is to make sure that expenses match with revenues. Expenses are reported in the period in which the expense is incurred regardless of when the expense is paid.