Bankruptcy is best defined as:
A)the termination of a going concern
B)the failure of a firm to meet its financial obligations in a timely manner
C)a legal proceeding for liquidating or reorganising a business
D)a legal process for revising the capital structure of a firm
E)the process of closing a business due to the inability to meet financial obligations

Question

Quizplus · Accepted Answer

Bankruptcy is a legal proceeding that signifies the inability of a business to meet its financial obligations. This can either lead to liquidation or reorganization of the business under the supervision of a court. Therefore, option C is the most appropriate definition of bankruptcy.

Bankruptcy Is Best Defined As