An Entity Which Qualified for Fresh-Start Accounting Is Not Required

question 7

Multiple Choice

An entity which qualified for fresh-start accounting is not required to disclose which of the following items in their initial financial statements?

• A)Adjustments from historical cost of assets and liabilities
• B)Amount of debt of the prior entity forgiven
• C)Amount of ending retained earnings/deficit of the prior entity
• D)Changes to the management team from the prior entity

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Definitions:

Risk Assessment

The identification, evaluation, and prioritization of risks followed by coordinated efforts to minimize or control their impact.

Indemnity

A contractual obligation of one party to compensate the loss incurred by another party due to the acts of the indemnitor or another party.

Insurance Claims

Requests made by policyholders to an insurance company for compensation or coverage for a covered loss or policy event.

Profiting

The act of earning a financial gain or benefit, often from business operations or investments.