Which of the Following Situations Is a Person Who Could

question 104

Multiple Choice

Which of the following situations is a person who could be insolvent?

• A)Assets $50,000; annual expenses $60,000
• B)Assets $68,000; net worth $22,000
• C)Liabilities $45,000; net worth $6,000
• D)Assets $5,000;liabilities $6,000
• E)Annual cash inflows$48,000; liabilities $50,000

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Definitions:

Common Carrier

A carrier that is licensed to provide transportation services to the public.

Strictly Liable

Being legally responsible for damages or loss, irrespective of fault or intent.

Bailment

The transfer of possession of property from one person to another under agreement that the property will be returned or otherwise disposed of according to the terms of the agreement.

Fixture

An item of property that is attached to a building or land in such a way that it is considered legally part of the property.