Generally accepted accounting principles, or GAAP, are standards that encompass the details, complexities, and legalities of business and corporate accounting. GAAP guidelines require businesses to prepare financial statements according to the matching principle using the accrual basis of accounting.

For example if the company Samsung wants to do Buisness, they must show their revenues before regulating bodies. They must follow the GAAP guidelines to do any financial activity. This helps external users to invest at the company.