There are supposed to be 1024 megabytes in a gigabyte, but manufacturers of computers and storage space round down to 1000 megabytes per gigabyte, since the prefix reflects the International System of Units. Because Windows adheres to the 1024 rule, 1 gigabyte storage devices appear to have 976 megabytes.
Computers work off of binary numbers called bits. One byte equals eight bits. A kilobyte equals 1024 bytes. A megabyte equals 1024 kilobytes. A terabyte equals 1024 gigabytes. As with the megabyte to gigabyte conversion, manufacturers round down in each of these cases, so Windows reads them as smaller than expected.