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Generally accepted accounting principles (GAAP) define the computation of financial statement income. It includes a complex set of rules that are designed to provide consistent treatment in accounting so that the net income derived on a financial statement will be comparable to the computational efforts for all published financial statements.
Without the consistency, an investor or a banker, for example, could not trust that the statements of one company are comparable to another. Without rules, the ...
The 295 word, cited solution explains the concepts of taxable income versus financial income with examples.