Which of the Following Is Not an Indirect Cost of Bankruptcy

question 2

Multiple Choice

Which of the following is not an indirect cost of bankruptcy?

• A) Legal fees
• B) Delayed liquidation
• C) Costs to creditors
• D) Loss of customers

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Definitions:

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, such as issuing debt or equity.

Indirect Method

A technique used in cash flow statements where net income is adjusted for non-cash transactions and changes in working capital to arrive at cash flow from operating activities.

Operating Activities

Activities that relate directly to the primary operations of a company, such as sales and service activities, and are reflected in the company's cash flows.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.