Why Is It Important for an Employer to Classify a Worker

question 33

Multiple Choice

Why is it important for an employer to classify a worker as either an employee or an independent contractor?

• A)For reimbursement purposes
• B)For child support obligations purposes
• C)For government tracking purposes
• D)For tax reporting purposes

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Definitions:

Equipment Account

An account in financial statements that represents the cost of equipment purchased by a business, excluding any accumulated depreciation.

Land Improvements

An asset account that records improvements made to land; such improvements have a limited life and are subject to depreciation (examples are a driveway or fences).

Limited Life

A term often used to describe the finite existence or duration of certain entities or agreements.

Installation Costs

The expenses associated with setting up equipment or machinery for use, which can include labor, materials, and other direct or indirect costs.