C-Plus Software Corporation Needs Money to Meet Its Payroll

question 42

Multiple Choice

C-Plus Software Corporation needs money to meet its payroll.Drake,president and owner of C-Plus,asks East Main Bank to loan C-Plus the funds.East Main insists that Drake sign the loan applica?tion,making himself personally liable for payment whether or not C-Plus defaults.If Drake signs the application,he will be

• A)a debtor in possession.
• B)a preferred creditor.
• C)a surety.
• D)a trustee.

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Definitions:

Equipment Depreciation

This refers to the accounting process of allocating the cost of physical assets over their useful lives to account for the loss in value.

Spending Variance

The difference between the actual expenditure and the budgeted amount.

Machine-Hours

A measure used to allocate manufacturing overhead costs to products based on the number of hours machines are used in the production process.

Spending Variance

A measure of the difference between the budgeted amount of expenses and the actual amount spent.