ERP Glossary - G: GAAP to Gross Profit

GAAP

Generally Accepted Accounting Practices These are the leading compilation of accounting standards in the US. Organizations which choose accounting methods not in compliance with GAAP are generally preconceived to be ethically questionable by auditors, potential buyers, and the IRS.

Gantt chart

A project management tool which combines bar charting, descriptive words, and basic math to indicate what the sequential tasks in a project are, and when each must be completed in order for the project to complete on time. A Gantt chart is intended to simultaneously communicate and highlight any problems, conflicts, delays, and resource constraints, by expressing tasks in terms of time bars arranged in temporal order from right to left and top to bottom.

GATT (General Agreement on Tariffs and Trade)

The complicated, but comprehensive, global agreement specifying the rules for international trade. While the GATT has been a continually evolving set of policies since its inception in 1946, the creation of the WTO - world trade organization - has reduced GATT's importance going forward.

General Ledger

A permanent record - historically a physical book, but more commonly a computer program today - containing all of the financial transactions of an organization. The general ledger uses double entry bookkeeping, which means each transaction generates both a debit and credit account entry, to ensure integrity and accuracy. All financial reports are constructed utilizing the general ledger.

Goodwill

The monetary value assigned to the accumulated reputation a company has established, that causes customers to be loyal, attracts good talent, and reflects positive brand name recognition. Goodwill is probably the largest guesswork involved in accounting, since it can only be accurately valuated in the event of a company sale.

Gross profit

The numerical difference between revenue and cost of goods sold. Specifically, gross profit does not include non-manufacturing fixed costs, and for that reason will always be a larger number than net profit.

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Richard Barker

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Richard Barker