A Company Is Insolvent When

question 12

Multiple Choice

A company is insolvent when:

• A) It is unable to pay debts as the obligations come due.
• B) It is more likely than not that it will not be able to pay debts within a reasonable period of time following the date such obligations become due.
• C) It is unable to timely remit payment on more than two-thirds of its outstanding obligations measured on a rolling three-month basis.
• D) It is unable to pay debts within 90 days following the close of the company's reporting year, whether such year is a calendar or fiscal year.
• E) It is in default on one-third or more of its outstanding debt obligations.

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Definitions:

Deterred

Discouraged from taking an action due to fear of negative consequences or obstacles.

Catharsis Effect

The process of releasing, and thereby providing relief from, strong or repressed emotions, often discussed in therapeutic contexts.

Positive

Characterized by the presence or possession of features or qualities rather than their absence.

Negative

A term often used to denote the absence or opposition of a condition, quality, or action.