When First National Bank informed Branch Company that the company had ________, Branch decided to sell its receivables to a factor to meet the current payroll. This factoring arrangement addresses the accounting characteristic or concept of ___________.

• A :

  reached its maximum debt; liquidity

• B :

  defaulted on its loan; the going-concern entity

• C :

  been turned down for a loan; the valuation principle

• D :

  met all previous obligations; liquidity