Final answer:
Traditional rules of accounting, such as GAAP, provide guidelines for summarizing and reporting financial activities.
Explanation:
Traditional rules of accounting refer to the generally accepted accounting principles (GAAP) that provide a shared set of rules for summarizing and reporting financial activities. These rules guide when an organization can claim ownership of assets or revenue earned. Accounting also involves using past earnings records to estimate future potential and following specific regulations set by institutions like the SEC and FASB.
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