1.These are assets with realizable values less than the expected net settlement amounts of the liabilities for which they have been pledged as security

a.Assets pledged to fully secured creditors

b.Assets pledged to partially secured creditors

c.Free assets

d.Deficiency assets

2.ABC Co. called in its outstanding shares and replaced them with new shares of lower par value.ABC Co. then used the resulting share premium from the new issuance to wipe out the negative balance in its retained earnings account (i.e., deficit). Which of the following best describes this procedure?

a.Recapitalization

b.Group reorganization

c.Troubled debt restructuring

d.Corporate rehabilitation

3.Which of the following financial reports is prepared by entities undergoing liquidation?

a.Statement of changes in net assets

b.Statement of affairs

c.Statement of realization and liquidation

d.B and C

4.The total unsecured liabilities without priority can be computed as

a.unsecured creditors without priority plus deficiency of assets pledged to partially secured creditors

b.unsecured creditors without priority less estimated realizable value of assets pledged to partiallysecured creditors

c.sum of administrative expenses, unpaid employee salaries and benefits, and taxes and assessments

d.total liabilities less priority claims

5.The estimated recovery percentage of unsecured creditors without priority can be computed as

a.net free assets less total unsecured liabilities without priority

b.net free assets divided by total unsecured liabilities without priority

c.1 minus (estimated deficiency divided by unsecured liabilities without priority)

d.B or C