When a Business Goes into Receivership

question 48

Multiple Choice

When a business goes into receivership:

• A)All of the assets of the business pass automatically to the receiver.
• B)All the assets of the business are sold and the proceeds of sale are distributed to the creditors.
• C)Control of the business passes temporarily to the receiver.
• D)It is an indication that the business is insolvent.

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Definitions:

Cash at End

Refers to the amount of cash a company has at the end of a financial period, important for assessing liquidity.

Non-current Debt

Long-term financial obligations that are due beyond the next twelve months, reflecting a company's long-term financing strategies.

Lending Purposes

The specific reasons or objectives behind the issuance of a loan, such as business expansion or purchase of equipment.

Financing Activities

Transactions between a company and its creditors or investors used to fund the company's operations or expansions, reflected in the cash flow statement.