Which One of the Following Statements About Bankruptcy Is False

question 107

Multiple Choice

Which one of the following statements about bankruptcy is false?

• A) Bankruptcy law is identical in every province of Canada.
• B) All creditors of a bankrupt debtor are treated equally and will receive shares of the assets directly in proportion to how much is owed to each of them.
• C) A debtor who has been discharged from bankruptcy is released from his previous financial obligations.
• D) Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to a trustee who acts on behalf of creditors
• E) Bankruptcy law may allow a debtor to escape from having to pay his debts.

---

Definitions:

Operating Cash Flows

Cash generated from the core business activities of a company, excluding investing and financing activities.

Cash Flows

Financial statement entries that represent the net amount of cash and cash equivalents being transferred into and out of a business.

Credit Evaluations

Assessments conducted to determine the creditworthiness of individuals or entities, analyzing their ability to repay debts based on past and current financial activity.

Lending Decisions

The process undertaken by financial institutions to assess the creditworthiness of potential borrowers and decide whether to extend credit.