A Firm Is Not Bankrupt or in Bankruptcy Until It

question 93

True/False

A firm is not bankrupt or in bankruptcy until it files or its creditors file a petition for reorganization or liquidation with the federal bankruptcy courts.

---

Definitions:

Parent Entity

A company that owns enough voting stock in another corporation to control management and operations by influencing or electing its board of directors.

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements to combine the financial information of a parent company and its subsidiaries.

Non-controlling Interest

The portion of equity interest in a subsidiary not held by the parent company.