Question

Suppose you are starting a business, Wholly Shirts, to imprint logos on T-shirts. In organizing the business and setting up its accounting records, you take your information to a CPA to prepare financial statements for the bank. Name the organization that governs the majority of the guidelines that the CPA will use to prepare financial statements for Wholly Shirts. What are those guidelines called?

Short answer

Financial Accounting Standards Board (FASB) governs the guidelines, and these guidelines are known as GAAP.

Step-by-step solution

Explanation on FASB

FASB is a private organization in the U.S. which is responsible for the creation and monitoring of accounting standards.

Explanation on GAAP

Generally Accepted Accounting Principles (GAAP) is the main accounting rule book. It helps in the preparation of financial statements accurately and widely acceptable.