BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When he left with no property of his own
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When he declares an insolvent by the Court
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When he terminates from a job he was holding
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When he declares himself to be an insolvent
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Detailed explanation-1: -Under the Uniform Commercial Code, a person is considered to be insolvent when the party has ceased to pay its debts in the ordinary course of business, or cannot pay its debts as they become due, or is insolvent within the meaning of the Bankruptcy Code.
Detailed explanation-2: -Insolvency is a type of financial distress, meaning the financial state in which a person or entity is no longer able to pay the bills or other obligations. The IRS states that a person is insolvent when the total liabilities exceed total assets.
Detailed explanation-3: -Every year thousands of companies face business insolvency and the risk that they may have to close down. Insolvency tends to happen in one of two ways: either the business can’t pay its bills on time, or it has more liabilities than assets on its balance sheet.
Detailed explanation-4: -A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. The forgiven debt may be excluded as income under the “insolvency” exclusion.
Detailed explanation-5: -What is balance sheet insolvency? Balance sheet insolvency occurs when a company’s liabilities outweigh its assets, preventing them from paying their debts as they fall due. This also takes into account contingent and prospective liabilities, such as deferred payments.