Register
A company is about to be closed down as it does not possess enough funds to pay for its debts. The business, therefore, places a low value on its inventory. Which concept is the business complying with?
94.4k views
20 votes
A company is about to be closed down as it does not possess enough funds to pay for its debts. The business, therefore, places a low value on its inventory. Which concept is the business complying with?

User Milovan Zogovic
by
5.5k points

1 Answer

6 votes

Answer:

The business is complying with the Liquidation concept.

Step-by-step explanation:

Liquidation in most cases is a concept in business that happens when a company sells off its inventory lower than their cost price because the company is about to be closed down.

It is usually to generate cash within a short period of time to pay off debts or creditors.

User Nisekgao
by
5.7k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.6m questions

7.3m answers

Other Questions

On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
Ensuring that an individual is who they claim to be is the function of _____. select one: a. confidentiality b. authorization c. availability d. authentication e. nonrepudiation
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
How do i figure out a months ending capital
Link Copied!