Answer to Question #23380 in Finance for Martha

Question

Claims on assets would be most relevant in a situation where a company is: (Choose the correct answer)
being liquidated
a going concern
making a loss
making a profit

Answer 1

a) being liquidated.
Cause Claims on assets include liabilities and owners' equity. Liquidation
procedure predicts covering of owners' equity and liabilities of
firm. Without doing this company can't be liquidated. So claims on assets
would be most relevant in a situation where a company is being liquidated.