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Sample Essay

The GAAP are established accounting principles are established to standardize financial accounting (Bragg et al, 2004, p1). They are predominately employed when it comes to accounting and book keeping and also while preparing financial statements for businesses.

The GAAP highlights the various procedures that have to be employed by the Proprietorships, partnerships and companies in order to initiate business, handle accounts, make regulatory reporting and perform audit on the financials.

The nonprofit agencies are business entities and corporations that do not exist to make profit and are also not public businesses. These businesses operate in a profitable manner but invest all profits back in the business for continuity.  The GAAP rules and principles provide that not for profit businesses and agencies also have to prepare financial statements for reporting that include statement of financial position, statement of activities, statement of cash flows and statement of functional expense (Jones et al).

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