The Following Are Required to Be Proven in Order to Use

question 87

Multiple Choice

The following are required to be proven in order to use the failing company doctrine except for which of the following?

• A) There is no other reasonable alternative for the failing company.
• B) No other purchaser is available.
• C) The failure of the failing company is not due to negligence of its management.
• D) The assets of the failing company would disappear from the market without the merger.

---

Definitions:

Inventory Item

refers to any product or goods that a company holds in stock with the intention of selling it to customers.

Inventory Period

The average time it takes for a company to turn its inventory into sales, indicating how quickly products are sold.

Obsolete Inventory

Items in stock that are out of date or no longer in demand, often leading to reduced value or write-offs.

Accounts Payable Period

The average number of days it takes for a business to pay its invoices from suppliers, reflecting its payment policy efficiency.