Accounting principles are the fundamental guidelines that govern how financial transactions are recorded and reported. These principles ensure consistency, transparency, and accuracy in financial statements, making it easier for stakeholders to understand a company's financial health. The most widely recognized set of accounting principles is the Generally Accepted Accounting Principles (GAAP) in the United States, which includes concepts like the accrual basis of accounting and the matching principle. These principles help businesses maintain reliable financial records and provide a framework for comparing financial performance across different organizations.