With Regard to Bankruptcy and Debt Collection, Which of the Following

question 6

Multiple Choice

With regard to bankruptcy and debt collection, which of the following is False?

• A) The Bankruptcy and Insolvency Act provides for a procedure for an insolvent debtor to make a proposal to his creditors that may or may not result in bankruptcy for the debtor.
• B) Both fraudulent conveyance and fraudulent preferences acts attempt to prohibit the debtor from delaying, hindering, or defrauding the creditor.
• C) Corporations that go into receivership may not be involved in bankruptcy; the receivership may be based on contract.
• D) The commission of a bankruptcy offence could prevent a bankrupt debtor from being discharged.
• E) Any assets obtained by a discharged bankrupt can still be claimed by former unsecured creditors who placed the former bankrupt into bankruptcy.

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Definitions:

Cash Account

An account that records all transactions involving cash inflows and outflows.

Bank Statement

A document provided by a bank, summarizing the transactions that occurred in an account over a period.

Accrual Accounting

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash transaction occurs.

Interest Expense

This is the cost incurred by an entity for borrowed funds, reflected as a line-item expense in the income statement.