M2: Corporate Liquidation

Question 1

3 most common cited reasons of company failures

Answer 1

✔ Poor administration
✔ Unwarranted debt
✔ Insufficient accounting application

Question 2

Failure to pay currently maturing obligationa due to insufficient liquid funds

Answer 2

Illiquidity

Question 3

A financial condition in which the sum of all debts is greater than all of its assets at fair valuation

Answer 3

Insolvency

Question 4

The petition is made by 3 or more creditors

Answer 4

Involuntary solvency

Question 5

Petition is made by the entity itself to the RTC

Answer 5

Voluntary Solvency

Question 6

What standard requires an entity to consider “all available information about the future, which is AT LEAST but not limited to 12 months from the end of the reporting period”?

Answer 6

PAS 1 - Presentation of FS

Question 7

PAS 1 also requires an entity to disclose when it does not present FS on a going concern

Answer 7

TRUE

Question 8

Who oversees all aspects of bankruptcy proceedings

Answer 8

Regional Trial Court