What accounting principles should Gokhale Method Institute, Inc. adhere to when preparing financial statements?

Basis of Presentation

This summary of significant accounting policies of the Company is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management, who is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in United States of America ("U.S. GAAP") and have been consistently applied in the preparation of the financial statements.

Use of Estimates

Management of the Company has made certain estimates and assumptions relating to the reporting of assets, liabilities, results of operations, and the disclosure of contingent assets and liabilities to prepare these financial statements in accordance with accounting principles generally accepted in the United States of America. Actual results could differ from these estimates.

Cash and Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all highly liquid investments and investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on hand.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable is primarily comprised of net royalty receivables from franchises, franchise fees, or class fees collected by GME. Accounts receivable is recorded at the net realizable value expected to be received through the aforementioned revenue streams.

Source: Item 22 — CONTRACTS (FDD page 34)