Technical insolvency occurs when the ____.
A) firm is unable to meet its current obligations as they come due, even though the value of its assets exceeds its liabilities
B) recorded value of the firm's assets is less than the recorded value of its liabilities
C) firm files a bankruptcy petition in accordance with the Federal bankruptcy laws
D) owners of the businesses lack experience

Question

Quizplus · Accepted Answer

Technical insolvency occurs when a firm is unable to meet its current obligations as they come due, even though the value of its assets exceeds its liabilities. This means that the firm may have valuable assets, but it does not have enough cash or liquid assets to meet its debts on time.

Technical Insolvency Occurs When the ____