Financial accounting numbers can be used to define contract terms and monitor compliance with contract terms.

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Financial accounting numbers can provide important information on the financial performance of a company, which can be used to set contract terms and monitor compliance with those terms. For example, a contract may specify certain financial ratios that a company must maintain in order to remain in compliance, and financial accounting numbers can be used to monitor whether those ratios are being met. Additionally, financial accounting numbers can be used to calculate payments due under a contract, such as revenue-sharing agreements or royalty payments based on sales.

Financial Accounting Numbers Can Be Used to Define Contract Terms