Multiple Choice
Under federal tax laws, what is the tax treatment for an employer providing \$50,000 of group-term life insurance coverage to an employee?
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1. Introduction to Accounting
Types of Accounting
Struggling with Financial Accounting?
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Which of the following is one primary purpose of contract administration in accounting?
A
To determine the market value of company assets
B
To prepare annual tax returns for the organization
C
To ensure that all terms and conditions of a contract are fulfilled by both parties
D
To record only cash transactions in the financial statements
Verified step by step guidance1
Understand the concept of contract administration in accounting: Contract administration involves managing and ensuring compliance with the terms and conditions of a contract between two parties.
Identify the primary purpose of contract administration: The goal is to ensure that all obligations, rights, and responsibilities outlined in the contract are fulfilled by both parties.
Evaluate the options provided in the question: Analyze each option to determine whether it aligns with the primary purpose of contract administration.
Option 1: Determining the market value of company assets is unrelated to contract administration, as it pertains to asset valuation rather than contract compliance.
Option 2: Preparing annual tax returns is a tax-related activity and does not fall under the scope of contract administration. The correct answer is the option that ensures fulfillment of contract terms and conditions.
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