Question

The purpose of GAAP's flexibility in its reporting standards allows companies to: Select one: a. Smooth reported revenues and earnings over several reporting periods. b. Change accounting estimates to meet target sales or earnings. c. Change accounting principles to improve reported earnings. d. Adopt specific accounting and reporting procedures to represent the firm's activities more accurately.

Answer 1

Answer:

D. Adopt specific accounting and reporting procedures to represent the firm's activities more accurately.

Explanation:

GAAP in accounting means Generally accepted accounting principle. It is a uniform collection of accounting rules and standards for reporting financial accounting for organizations

The main reason or purpose of GAAP is to ensure that there is transparency and consistency in the reporting of financial details from one organization to another. The aim is to also help firms record their financial activities accurately by adopting specific accounting and reporting procedures as stipulated by GAAP.