Final answer:
Under GAAP, a business is required to be capable of being managed to provide economic benefits, which implies the presence of essential elements like inputs, outputs, and processes.
Step-by-step explanation:
According to GAAP (Generally Accepted Accounting Principles), a business must be capable of being managed to provide economic benefits. This means that a business should have the necessary elements such as inputs, outputs, and processes to create goods and services that are valuable to consumers. It is not a requirement under GAAP for a business to have goodwill or to specifically generate a return, although businesses are generally driven by the motive to make a profit. The longevity and success of a business are frequently contingent upon its ability to effectively utilize resources to produce products or services that yield economic benefits and, in turn, profits. These profits are crucial as they are a fundamental measure of the business's ability to thrive and continue operations.