U.S. GAAP
Generally Accepted Accounting Principles, the common set of U.S. financial reporting standards.
FAR rarely asks “what is GAAP” outright; the tell is usually a question about authority — which source governs a transaction. The hinge is that the Codification is the single authoritative source of nongovernmental U.S. GAAP, so anything outside it (textbooks, FASB Concepts Statements, AICPA practice aids) is nonauthoritative. Watch for items pitting U.S. GAAP against IFRS (U.S. GAAP is often framed as more rules-based, IFRS more principles-based; LIFO permitted under GAAP, prohibited under IFRS; development costs generally expensed under GAAP, capitalizable under IFRS) or against a special-purpose framework like cash or tax basis (the current term for what older texts call OCBOA), which is not GAAP.
The classic trap conflates GAAP with the accrual basis it requires or the matching (expense-recognition) rule: accrual is the measurement convention and matching is one recognition rule, while GAAP is the entire authoritative body that mandates them. Remember U.S. state and local governments follow GASB, not FASB — examiners love that swap. Hook: “Codification = the only place GAAP lives.”
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