When is a firm insolvent from an accounting perspective?

When is a firm insolvent from an accounting perspective? Multiple Choice When the firms revenues cease When the market value of the firms equity equals zero When the firm has a negative net worth When the firms debt exceeds the value of the firms equity When the firm is unable to meet its financial obligations in a timely manner When is a firm insolvent from an accounting perspective? Multiple Choice When the firm’s revenues cease When the market value of the firm’s equity equals zero When the firm has a negative net worth When the firm’s debt exceeds the value of the firm’s equity When the firm is unable to meet its financial obligations in a timely manner

The correct answer is Option 3
According to the acconunting perspective, when the firm is
unable to meet the debt obligations within the stipulated time then
the firm is considered as Insolvent and due processes follows
afterwards.

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