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Accounting standards prescribed by generally accepted accounting principles (GAAP) are important because they aims to improve the clarity, consistency, and comparability of the communication of financial information.

What is GAAP?

GAAP: The Generally Accepted Accounting Principles (GAAP) are standards and rules that guide business entities to record financial information in the books of accounts.

  • GAAP helps business entities to present their financial statements with utmost accuracy.
  • GAAP facilitates the companies in explaining the legalities and complexities associated with the recording of financial information.
  • Private companies are also required to follow GAAP because the principles define the applicability of accounting rules mandatory for all businesses.

To learn more about GAAP , refer: https://brainly.com/question/24107590?referrer=searchResults

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