To protect yourself from unknown tax liabilities when buying the stock of a business,it makes sense to place part of the purchase price in an escrow account that is earmarked to pay for any corporate liabilities.This is referred to as
A) Holdback money
B) Thinning the assets
C) Escrow settlement
D) Goodwill

Question

Quizplus · Accepted Answer

Holdback money is a portion of the purchase price that is placed in an escrow account to cover any unforeseen liabilities or obligations that may arise after the purchase of a business.

To Protect Yourself from Unknown Tax Liabilities When Buying the Stock