Accounting for IGCSE & O level - Final Statements (Section 7 - No. 18)
What will happen if a business cannot pay for its running expenses?
The business will not pay for its running expenses.
The business may have to pay the expenses via a bank loan.
The business will have very good liquidity position.
The business will go into liquidation or insolvency.
Explanation
If a business cannot pay running expenses, it is in a precarious financial situation.
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