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Generally accepted accounting principles (GAAP), created with authoritative support, are principles, rules and guidelines required to follow by accountants when preparing financial statements. The Hierarchy of GAAP is a structure consists of four different categories of well- developed accounting principles. The categories are from A to D with category A containing principles with the most authoritative support and category D having the lease. Major sources of The Hierarchy of GAAP are FASB Standard, Interpretations, and Staff Positions; APB Opinions; and AICPA Accounting Research Bulletins. This hierarchy is important because it minimize the financial data from being biased and inconsistency by using multiple sources of the GAAP instead of just one. For example, if two or more sources in a given category do not agree with a specific transaction, then a higher category should be followed. Two primary qualities that make its accounting information effective are relevance and reliability. Relevant information has predictive value, which help users foretell the outcome of events in the past, present, and future. Another reason relevant information is effective is that it is presented in a timely manner early enough for the user to consider when making a decision. It also helps users clarified and adjusted expectations in the past because relevance information has feedback value. Reliability is another quality that makes its accounting information effective. Reliable information is verifiable, it represents what actually happened, and it’s unbiased. Comparability and consistency are two secondary qualities that make accounting information useful. Comparability gives users the ability to compare information between companies in the same industry to make their business decisions. Consistency is another important quality for accounting information to be

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