1. What are the objectives of the bankruptcy laws in the United States? a. Provide relief for the court system and ensure that all debtors are treated the same. b. Distribute assets fairly and discharge honest debtors from their obligations. c. Protect the economy and stimulate growth. d. Prevent insolvency and protect shareholders. 2. A company's management has monitored recent events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. What should management do next? a. Management should disclose that substantial doubt exists that the company can remain in existence. b. Management should examine the plans created to address the concern. c. Management should adjust all asset balances to fair value. d. Management should adjust all liabilities to expected settlement amounts. 3. A company's management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. Management studies the plans created internally to address this risk. How can the company avoid disclosing that this substantial doubt exists? a. The plans must be reviewed by the chief financial officer. b. It must be probable that the plans will be implemented, and it must be probable that the plans will mitigate the conditions that raised substantial doubt. c. Disclosure of the substantial doubt is required regardless of the availability of the plans. d. The plans must have been tested before the end of the financial year by a liquidity expert