Cla 10
Cla 10
Cla 10
Cash 30,000
3. A statement of affairs is the initial report prepared at the start of the liquidation process.
True
4. In the accountability technique of accounting used by a trustee for a debtor in bankruptcy liquidation,
there is no ledger account for owner’s equity.
True
5. Liabilities in the statement of affairs are classified into short-term and long-term liabilities.
False
6. Voluntary insolvency occurs when three or more creditors of the insolvent corporation file a petition to a
court of law for the adjudication of the corporation as insolvent.
False
7. Creditors having priority under the Bankruptcy Law include creditors having security interests
collateralized by specific assets of the debtor.
False
8. A debtor in bankruptcy liquidation will not be discharged within six years of a previous bankruptcy
discharge.
True
9. Unsecured creditors whose claims are to be paid in full from the assets of a debtor in bankruptcy
liquidation before any cash is paid to other unsecured creditors are classified as unsecured creditors
having preference.
False
10. All stockholders of a corporation undergoing bankruptcy reorganization must approve the plan or
reorganization before it is confirmed by the bankruptcy court.
False
11. Assets in a statement of affairs are assigned to one of three categories:assets pledged for fully secured
liabilities, assets pledged for partially secured liabilities, and priority assets.
False