Question

When liabilities exceed assets, a person is said to be

• A. Solvent
• B. Bad Debts
• C. Bankrupt
• D. Insolvent

Answer 1

Answer:

D. Insolvent

When a person’s total liabilities are more than total assets, the person cannot pay all debts. Such a person is called insolvent. Bankrupt means a person who is legally declared insolvent by a court.