What is the term used for the set of rules and regulations that govern financial statements?

The term that refers to the set of rules and regulations governing financial statements is Generally Accepted Accounting Principles (GAAP). GAAP represents a standardized framework that outlines how various accounting transactions and financial reporting should be conducted, ensuring consistency, transparency, and comparability of financial statements across different entities and industries. These principles are critical for accountants and organizations to follow, as they help maintain the integrity of financial reporting and provide investors, regulators, and other stakeholders with reliable financial information.

By adhering to GAAP, organizations can enhance their credibility and allow stakeholders to make informed decisions based on accurate financial data. Various components, such as revenue recognition, expense reporting, and balance sheet disclosures, are all governed under GAAP.

The other options represent different concepts or standards in accounting and finance but do not encapsulate the comprehensive rules applicable to financial statements like GAAP does.