A firm can be insolvent because:
A)its liabilities exceed its assets.
B)it can't pay its bills when they're due.
C)the court issues an insolvency order.
D)either a or b.

Question

Quizplus · Accepted Answer

Insolvency is the state when a company is unable to pay its bills when they fall due or their liabilities exceed their assets. Therefore, options A and B are correct. Option C is not always necessary for insolvency to exist.

A Firm Can Be Insolvent Because