Jack started his business in the year 2000.Due to lack of planning and bad cash flow,Jack files for bankruptcy and the business ceases to exist.This is a form of:

Question

Quizplus · Accepted Answer

Jack's business ceasing to exist due to bankruptcy indicates that the business has been liquidated, which means it has been closed down permanently. Liquidation usually happens when a company cannot meet its financial obligations and is unable to pay off its debts. In such a scenario, the company's assets are sold to pay off as much of its debt as possible, and the business is dissolved. This is different from reorganization, which involves restructuring the company and its debts to try and continue the business. In this scenario, Jack's lack of planning and cash flow has led to liquidation, making option A the correct answer.

Jack Started His Business in the Year 2000