Which One of the Following Is False with Regard to Creditors

question 2

Multiple Choice

Which one of the following is false with regard to creditors' remedies?

• A) A person who wins in an action and is awarded damages is called a "judgment creditor."
• B) A garnisheeing order is an order to the sheriff to seize assets of a judgment creditor to satisfy a judgment debt.
• C) A guarantor is a person who agrees to be responsible for a debt if the borrower (the person primarily liable) defaults.
• D) A guarantor may avoid liability if the creditor does some act or enters into an agreement that weakens the guarantor's position.
• E) A debenture can create a "floating charge" that will not attach to anything specifically until the debtor defaults or until the happening of another "crystallizing" event.

---

Definitions:

Debt-to-Equity

A metric used to evaluate a company's financial leverage, calculated by dividing its total liabilities by its shareholders' equity.

Earnings Per Share

A company's profit allocated to each outstanding share of common stock, indicating the company's profitability on a per-share basis.

Receivable Turnover Ratio

A measure of how efficiently a company collects its accounts receivable, calculated by dividing net credit sales by average accounts receivable.

Inventory Turnover Ratio

A metric that calculates the number of times inventory is sold or consumed in a given time frame, reiterating the effciency of inventory management.