Fresh-start accounting must be adopted by certain debtors emerging from chapter 11 bankruptcy. When is fresh start accounting required? What are some of the characteristics of fresh-start accounting?
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FrF Fresh-start accounting must be adopted by certain debtors emerging from chapter 11 bankruptcy.
- When is fresh start accounting required?
- What are some of the characteristics of fresh-start accounting?
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- If a bankruptcy is deemed likely to occur and is reasonably estimated, what would be the recognition and disclosure requirements for the company?In a bankruptcy, which of the following statements is true? a. An order for relief results only from a voluntary petition. b. Creditors entering an involuntary petition must have debts totaling at least $21,625. c. Secured notes payable are considered liabilities with priority on a statement of affairs. d. A liquidation is referred to as a Chapter 7 bankruptcy, and a reorganization is referred to as a Chapter 11 bankruptcy.Choose the correct. In a bankruptcy, which of the following statements is true?a. An order for relief results only from a voluntary petition.b. Creditors entering an involuntary petition must have debts totaling at least $21,625.c. Secured notes payable are considered liabilities with priority on a statement of affairs.d. A liquidation is referred to as a Chapter 7 bankruptcy, and a reorganization is referred to as a Chapter 11 bankruptcy.
- Choose the correct. What is a debtor in possession?a. The holder of a note receivable issued by an insolvent company prior to the granting of an order for relief.b. A fully secured creditor.c. The ownership of an insolvent company that continues to control the organization during a bankruptcy reorganization.d. The stockholders in a Chapter 7 bankruptcy.Choose the correct. What is an inherent limitation of the statement of financial affairs?a. Many of the amounts reported are only estimates that might prove to be inaccurate.b. The statement is applicable only to a Chapter 11 bankruptcy.c. The statement covers only a short time, whereas a bankruptcy may last much longer.d. The figures on the statement vary as to a voluntary and an involuntary bankruptcy.What is the accounting equation for a trustee in a bankruptcy proceeding (i.e., corporate liquidation)? a. Assets equal accountability b.Assets equal liabilities plus owner’s equity c.Assets equal liabilities minus estate deficit d.Assets minus liabilities equals accountability
- Choose the correct. An involuntary bankruptcy petition must be filed bya. The insolvent company’s attorney.b. The holders of the insolvent company’s debenture bonds.c. Unsecured creditors with total debts of at least $15,775.d. The company’s management.What is an inherent limitation of the statement of financial affairs?a. Many of the amounts reported are only estimates that might prove to be inaccurate.b. The statement is applicable only to a Chapter 11 bankruptcy.c. The statement covers only a short time, whereas a bankruptcy may last much longer.d. The figures on the statement vary as to a voluntary and an involuntary bankruptcy.Identify the various types of creditors based on their status during a bankruptcy.
- Choose the correct. What is a cram down?a. An agreement about the total amount of money to be reserved to pay creditors who have priority.b. The bankruptcy court’s confirmation of a reorganization even though a class of creditors or stock-holders did not accept it.c. The filing of an involuntary bankruptcy petition, especially by the holders of partially secured debts.d. The court’s decision as to whether a particular creditor has priority.Choose the correct. Which of the following is not an expected function of a bankruptcy trustee?a. Filing a plan of reorganization.b. Recovering all property belonging to a company.c. Liquidating noncash assets.d. Distributing assets to the proper claimants.What is a cram down?a. An agreement about the total amount of money to be reserved to pay creditors who have priority.b. The bankruptcy court’s confirmation of a reorganization even though a class of creditors or stockholders did not accept it.c. The filing of an involuntary bankruptcy petition, especially by the holders of partially secured debts.d. The court’s decision as to whether a particular creditor has priority.
