A Business Realizes That It Cannot Pay Its Creditors and Seeks

question 61

Multiple Choice

A business realizes that it cannot pay its creditors and seeks relief under the Bankruptcy and Insolvency Act. Which of the following is TRUE?

• A)Its only option is to make a voluntary assignment in bankruptcy.
• B)Its only option is to wait until petitioned into bankruptcy by its creditors.
• C)It can make a proposal under the Bankruptcy and Insolvency Act and creditors will automatically be prevented from suing for a certain period of time.
• D)It can only wait for a receiving order to be issued
• E)None of the above.

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Definitions:

American Farmers

Refers to individuals in the United States engaged in the practice of agriculture, raising crops and livestock for consumption or sale.

Farm Goods

Products produced through agriculture, including crops, livestock, and other raw materials.

Increasing Production

Refers to the process of augmenting the output or manufacture of goods and services in an economy.

Agricultural Adjustment Act

A New Deal legislation passed in 1933 aimed at reducing agricultural production through financial incentives, thus raising farm prices.