Generally Accepted Accounting Principles, or GAAP, are a set of rules and standards that guide how financial statements are prepared and presented. These principles ensure consistency and transparency in financial reporting, making it easier for investors, regulators, and other stakeholders to understand a company's financial health. GAAP covers various aspects of accounting, including how to recognize revenue, measure assets, and report expenses. By adhering to these guidelines, companies can provide accurate and comparable financial information, which helps build trust and confidence in the financial markets.