Dividend payment that has the effect of making the corporation insolvent, would fail to meet
A) the solvency test.
B) statutory reserve requirements.
C) the maintenance of capital test.
D) balance sheet convention.
E) the accounting test.

Question

Quizplus · Accepted Answer

A dividend payment that renders a corporation insolvent would fail the solvency test, which ensures that a company can meet its debts as they come due after the dividend is paid.

Dividend Payment That Has the Effect of Making the Corporation