Which of the Following Statements Is TRUE with Respect to the Relationship

question 9

Multiple Choice

Which of the following statements is TRUE with respect to the relationship between bankruptcy and insolvency?

• A)A person can be bankrupt without being insolvent.
• B)An act of insolvency automatically triggers bankruptcy.
• C)Before a person can be put into bankruptcy involuntarily, a court must find that they have committed an act of bankruptcy, which includes being insolvent.
• D)While an individual can be either bankrupt or insolvent, a corporation can be bankrupt but never insolvent.
• E)Bankruptcy begins with a bankruptcy order, whereas insolvency begins with a receiving order.

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Definitions:

Certification

The process of verifying the authenticity, quality, or qualifications of something or someone through a formal statement or document.

Contractual Liability

The legal obligation arising from a contract that requires a party to compensate for any losses or damages incurred.

Competent and Professional

Refers to possessing the required skills, knowledge, and ethical standards expected in a professional setting.

Third Party Intended Beneficiary

A person or entity that, while not a party to a contract, is intended by the contracting parties to benefit from its performance.