What are the possible actions when a business becomes insolvent?

Q: how Settlement of accounts on dissolution of the firm

A: DISSOLUTION OF FIRM -  Dissolution is nothing but the termination of the relationship between the…

Q: i. What are Companies under the companies act, 1963 (act 179) and how does a company raise money to…

A: Companies under Companies Act, 1963 (Act 179) Types of Company (1) An incorporated company may be…

Q: What are some situations other than immediate financial distressthat lead firms to file for…

A: Financial distress is the essential cause or the key reason for liquidation; it happens when…

Q: Which of the following is false regarding a sole proprietorship? The owner has unlimited personal…

A: There are several forms of business organisation, in which businesses can be run and maintained.…

Q: In an S Corporation are the unit holders liable for busin

A: Yes, they are liable for business losses too if they fulfill these requirements.

Q: How is financial leverage related to bankruptcy?

A: Answer: Financial leverage is the debt-to-equity ratio and the financial capital decreases…

Q: Which of the following represents an obligation of the company? Liability Asset Owners' Equity…

A: The obligation of a company is the company's responsibility that has to be paid.

Q: Which of the following is a disadvantage of the corporate form of business? Select one: O a.…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Unlimited liability meansa. there is no limit on the amount an owner canborrow.b. creditors will…

A: Unlimited Liabilities:-Unlimited liability arises in the sole proprietorship and in a general…

Q: Which of the these business organisations has a separate legal entity from its owner(s), and the…

A: Separate Legal entity: Separate legal entity means that business and owner are “separate for legal…

Q: A bankruptcy court enters an order for relief. How does this action affect an insolvent company and…

A: Bankruptcy:   Bankruptcy is the elimination of different types of debts. The acceptance of…

Q: Owners equity is not cash; it is not a liability: and it generally is not equal to the current worth…

A: Owners’ equity generally referred to as shareholders equity, it is the net amount that the equity…

Q: re the reasons for public (listed) companies bankrup

A: Bankruptcy is a legal proceeding that occurs when a person or business is unable to repay their…

Q: Two disadvantages of a proprietorship are (1) the relative difficulty ofraising new capital and (2)…

A: A sole proprietorship is a form of business entity which is owned and managed by an individual is…

Q: How does inflation affect the financial statements of a parent and subsidiary business?

A: Inflation is defined as the rise in price level in the economy, i.e. rise in the prices of goods and…

Q: When can a company forfeit its shares?

A: The mechanism by which a corporation forfeits the stock of an investor or stockholder who ceases the…

Q: Since a stock split changes information of a business, this transaction needs to be recorded.

A: Answer: False

Q: Is there an obligation to cease trading when a company is insolvent? If there is not, what are the…

A: Insolvency If the company faces sever financial crunch into the business or face cash shortage into…

Q: the issuance of its stock is an example of which type of business activity?

A: First we should know the meaning of all this terms,  a) Operating :- Its name is explaining…

Q: Can a business earn a gross profit but incur a net loss? Explain.

A: Gross Profit: Gross profit represents the revenue after the deduction of cost of goods sold from the…

Q: What are the different financial risks in business acquisition and combination?

A: Financial risk is the risk that the company has overpaid or has got more leverage than required or…

Q: why the company logo is an asset? what does mean by retained earning (when it is not distributed as…

A: Logos are intangible assets of a company. Intangible assets provide value to a company because they…

Q: How would one characterize  holding company?  a). A company that "holds" only assets, no…

A: A holding company is a business entity—usually a corporation or limited liability company (LLC).…

Q: Discuss how Floating and Fixed debentures affects the profitability of a business?

A: In floating debentures the interest rate of such debentures change will the level of changes... Such…

Q: 1. What are the powers of liquidator in the case of winding up of a company?

A: Liquidator:   It is a person appointed to handle the procedure of liquidation. All assets are sold…

Q: Explain how a firm loses value during the bankruptcy process from both a creditors and a…

A: Bankruptcy refers to the process where the company declares itself insolvent. Insolvency is the…

Q: Under which circumnstances should a company disclose contingent liabilites in the footnotes of the…

A: Note: The answer for question first is given above. For remaining, please post separately. Thanks!…

Q: Why is the Equity Valuation method is preferable from the point of view of an investor in valuing…

A: Valuation is the process of ascertaining the market value of the business or an asset. The valuation…

Q: In general, how much do unsecured creditors receive from aliquidation? How much do stockholders…

A: Liquidation of a company refers to a procedure in which all the assets of the company are sold and…

Q: Explain what "financial distress" means. Let's say that a company is in financial difficulties, and…

A: Introduction: Financial Distress is defined as a scenario in which a company's obligations, such as…

Q: If common stockholders are the owners of the company, why do they have the last claim on assets and…

A: common shareholders are the owners of the company because they are the actual owners, shareholder…

Q: director liability?

A: yes Directors square measure agents of the corporate in transactions they enter into on behalf of…

Q: Can a business earn a gross profit but incur a net loss?

A: Gross Profit is computed by deducting cost of goods sold from the sales revenue of the business. And…

Q: Selling equity in the business provides both the opportunity to repurchase and the obligation to…

A: A business is started with the capital of the owner(s). The contribution made by owners are used to…

Q: If common stockholders are the owners of the company, why do they have the last claim on assets and…

A: Common shareholders spend their capital in the company and thereby become the company's owners. As…

Q: If a director allows a company to continue to trade indefinitely and the company is placed into…

A: In a partnership, two or more parties agree to operate and manage a business and share the profits…

Q: The sale and distribution of the assets of a business on its termination is Group of answer choices…

A: Answer is liquidation

Q: How important is liquidation based value in a business?

A: Answer: Liquidation based value is the value of company that is determined on the basis of the…

Q: Is debt good for a company? Why or Why not?

A: In terms of finance, debt can be defined as the borrowed money on which the borrower of the fund is…

Q: Choose the correct. For a company emerging from bankruptcy, how are liabilities (other than deferred…

A: Liabilities:   The claims creditors have over assets or resources of a company are referred to as…

Q: Refers to the ability of the company to raise capital in case of financial distress.

A: Financial distress is a condition in which a company cannot generate sufficient revenues or income.

Q: While a company goes through reorganization, how should its assets and liabilities be reported?

A: Assets: These are the resources owned and controlled by business and used to produce benefits for…

Q: How does unlimited liability put a business owner atrisk?

A: The liability is the amount due to be paid to the outsiders by the Organizations.