GAAP is primarily used for which type of statements?

Generally Accepted Accounting Principles (GAAP) are a set of accounting standards and guidelines used primarily in the United States. These principles provide a framework for financial reporting that ensures consistency, comparability, and transparency in financial statements. Accordingly, GAAP is specifically designed for the preparation of financial statements that corporate entities in the U.S. must adhere to, including balance sheets, income statements, and cash flow statements.

Financial statements prepared under GAAP facilitate stakeholders, such as investors and creditors, in making informed decisions based on a company's financial performance and position. This is particularly important in the U.S. context, where regulatory bodies like the Securities and Exchange Commission (SEC) require public companies to follow GAAP to ensure that financial reporting is reliable and consistent for all companies listed on stock exchanges.

In other jurisdictions, different accounting standards may prevail, such as International Financial Reporting Standards (IFRS), which are widely used outside the United States. Therefore, while GAAP is essential for U.S. entities, it does not apply to government or non-profit financial statements in the same way, as these may have their own specific accounting guidelines or regulations.