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WHAT IS MEANT BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ?

Hi Kritika,
GAAP -  Generally Accepted Accounting Principles (GAAPs) are a set of basic rules and procedures prescribed by the Institute of Chartered Accountants of India (ICAI) which have to be followed while preparing financial statements. These are the Accounting principles, concepts and conventions which ensure that financial reporting is transparent and consistent from one organization to another. The management and the auditors are bound by The Companies Act, 1956 to follow GAAPs.
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Generally accepted accounting principles(GAAP) refer to the standard framework of guidelines forfinancial accountingused in any given jurisdiction; generally known asaccounting standardsorstandard accounting practice. These include the standards, conventions, and rules that accountants follow in recording and summarizing and in the preparation offinancial statements.

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