What Is the Process of Abatement

question 47

Multiple Choice

What is the process of abatement?

• A) An attempt to determine the deceased's intentions when the terms of the will are unclear.
• B) A reduction of various bequests when the estate is not adequate to satisfy them completely.
• C) Selling of assets included in an estate to be able to pay creditors.
• D) Payment of the claims of creditors.
• E) The establishment of how the creditors will be paid.

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Definitions:

Acid-test Ratio

Acid-test ratio is a financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets (cash, marketable securities, and current receivables) without selling any inventory.

Debt-to-equity Ratio

A ratio illustrating the proportional use of shareholder equity and debt in the acquisition of a company's assets.

Receivable Turnover

A financial metric indicating the efficiency of a company in collecting its accounts receivable or the effectiveness of its credit policy.

Inventory Turnover

A metric representing the frequency at which a business's stock is sold and restocked within a given timeframe, reflecting how effectively inventory is handled.