Question

What happens if a company is unable to pay its current liabilities?

Q: Answer-What happens if a company is unable to pay its current liabilities?

Current liabilities refer to the debts and obligations that a company is expected to pay within one year or its operating cycle, whichever is longer. These are debts that are due in the short term and must be paid off quickly to avoid default.

A It is forced to liquidate its assets.

B It is able to renegotiate its debts with lenders.

C It is able to defer its payments to a later date.

D It is able to borrow more money to pay off its debts.

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What happens if a company is unable to pay its current liabilities?

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