Question

What is the standard that defines how accountants record financial transactions?

A. IFRS (International Financial Reporting Standards)
B. GAAP (Generally Accepted Accounting Principles)
C. ISO 9001
D. SEC (Securities and Exchange Commission)

Answer 1

The standard that defines how accountants record financial transactions is GAAP (Generally Accepted Accounting Principles). GAAP is a set of accounting principles, standards, and procedures that companies use to prepare their financial statements.

Step-by-step explanation:

The standard that defines how accountants record financial transactions is GAAP (Generally Accepted Accounting Principles).

GAAP is a set of accounting principles, standards, and procedures that companies use to prepare their financial statements. It ensures that financial transactions are recorded consistently and accurately, making it easier for investors, creditors, and other stakeholders to understand and compare financial information across different companies.

For example, GAAP requires companies to record revenue when it is earned, rather than when the cash is received. This helps provide a more accurate depiction of a company's financial performance.