Once the Initial Bankruptcy Is Filed, Litigation by Creditors Is

question 5

Multiple Choice

Once the initial bankruptcy is filed, litigation by creditors is suspended. This is called a(n)

• A) automatic suspension.
• B) automatic stay.
• C) judicial stay.
• D) judicial suspension.

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Definitions:

Contra Asset Account

This is an account used in financial accounting to offset the balance of a related asset account, increasing the overall accuracy of the company's financial statement.

Accumulated Depreciation

The sum of all depreciation expenses allocated for a physical asset from the time it was first utilized.

Depreciation Expense

The systematic write-off of the cost of a tangible asset over its useful life.

Intangibles

Assets that lack physical substance but are nonetheless valuable to a company, such as patents, trademarks, goodwill, and copyrights.