A Prepack

question 11

Multiple Choice

A prepack:

• A)guarantees full payment to all creditors but lengthens the time span of the debt.
• B)is the joint filing of both a bankruptcy filing and a creditor-approved reorganization plan.
• C)protects the interests of both the current creditors and the existing shareholders.
• D)applies only if a firm files under Chapter 7 of the bankruptcy code.
• E)extends the time that a firm is protected by the bankruptcy process.

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Definitions:

Consignee

The individual or entity designated to receive goods being shipped or transported, who may not be the actual owner of the goods until certain conditions are met.

Consignment

A business arrangement in which goods are left in the possession of another party to sell, but ownership remains with the supplier until the goods are sold.

Inventory Items

Goods and materials that a business holds for the ultimate goal of resale or production in the course of operations.

LIFO Method

An inventory valuation method that assumes the last items placed in inventory are the first ones sold; LIFO stands for Last-In, First-Out.