When a company closes and sells its assets in order to pay its debts, it is called __________.
A) divestiture
B) liquidation
C) diversification
D) restructuring

Question

Quizplus · Accepted Answer

Liquidation is the process of closing a company and selling off its assets in order to pay off its debts. Divestiture refers to when a company sells off a subsidiary or business unit, rather than liquidating the entire company. Diversification refers to when a company expands into new products or markets. Restructuring refers to when a company makes significant changes to its organizational structure, operations, or finances in order to improve performance.

When a Company Closes and Sells Its Assets in Order