A debit balance will have built up on the profit and loss account.
In addition to (i), there may be other debit balances on the books, representing a non-existent or fictitious asset — e.g. goodwill.
The business may be unable to meet its obligations to creditors as and when payments become due. These obligations will include interest relating to loans.
There may be arrears of dividends on cumulative preference shares.
Unable to display preview. Download preview PDF.