Should a Business Fail After Receiving Shipping Documents from Its

question 44

Multiple Choice

Should a business fail after receiving shipping documents from its bank on the basis of a trust receipt, the bank:

• A)becomes a preferred creditor to the extent of the amount due less cash deposits with the bank
• B)sells off the assets
• C)auctions off the merchandise
• D)has a prior claim relative to other general creditors
• E)none of the above

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Definitions:

Income Beneficiary

An individual or entity entitled to receive income generated from a trust, estate, or other financial instrument.

Trust

A legal arrangement where one party holds property on behalf of another party, often used for managing assets, estate planning, and in charitable giving.

Personal Representative

An individual appointed to manage the estate of a deceased person during probate, sometimes known as an executor.

Testator

An individual who has made a will or given a testament, especially as it pertains to the disposition of their property after death.