Jun-Seo Owes $20,000 in Unsecured Claims to 15 Different Creditors,and

question 37

Multiple Choice

Jun-seo owes $20,000 in unsecured claims to 15 different creditors,and he has generally not been paying debts that are due.Two of Jun-seo's creditors want to force him into bankruptcy by filing an involuntary petition;the other creditors do not agree.Which of the following statements is correct about this situation?

• A)An involuntary petition cannot be filed because Jun-seo is not that deeply in debt.
• B)An involuntary petition cannot be filed because not enough creditors want to force Jun-seo into bankruptcy.
• C)An involuntary petition can be filed because Jun-seo is not making his payments in a timely way.
• D)An involuntary petition can be filed because any one of Jun-seo's creditors can force him into bankruptcy.

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Definitions:

Accounting

The systematic process of recording, analyzing, and reporting financial transactions of a business.

Tax Point

The specific time at which a taxable event occurs, determining the tax consequences for the individual or entity involved.

Shareholder Approval

The consent given by shareholders, usually through voting, for corporate actions such as mergers, acquisitions, or issuing new shares.

Merger

The combination of two or more companies into a single entity, either by closing the old entities into one new entity or by one company absorbing the others.