ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Insolvency is where an employer has no money to pay the people they owe in full and they have to make special arrangements to try to meet these debts.
Detailed explanation-2: -Liquidation is the process of selling off assets and using the proceeds to pay off creditors and shareholders. It is triggered when a company is insolvent and is unable to pay its debts. Liquidation can also be voluntary, when the company decides to go out of business and liquidate its assets.
Detailed explanation-3: -To liquidate assets means to convert non-liquid assets into liquid assets by selling them on the open market. An individual or company can voluntarily liquidate an asset, or can be forced to liquidate assets through the bankruptcy process.
Detailed explanation-4: -Liquidation is a process where the company’s assets are seized and realised, with the resulting proceeds used to pay off its debts and liabilities.