3.Which of the entities listed is not subject to an involuntary bankruptcy petition?

a.A municipality.

b.A partnership.

c.A wholesaler company.

d.A retailing corporation.

4.The highest priority for payment of unsecured claims in a bankruptcy proceeding is:

a.Wages up to $4,650 earned within three months before the petition.

b.Unpaid federal income taxes.

c.Administrative expenses of the bankruptcy.

d.Wages owed to an insolvent employee.

5.Which of the following situations that arise because of a debtor's financial difficulties and would not otherwise be acceptable to the creditor must be accounted for as a troubled debt restructuring?

a.As part of a negotiated settlement designed to maintain a relationship with a debtor, a creditor reduces the effective interest rate on debt outstanding to reflect the lower market interest rate currently applicable to debt of that risk class.

b.Because of a court order, a creditor reduces the stated interest rate for the remaining original life of the debt.

c.Because of a court order, a creditor accepts as full satisfaction of its receivable a building the fair value of which equals the creditor's recorded investment in the receivable.

d.As part of a negotiated settlement, a creditor accepts as full satisfaction of its receivable a building the fair value of which equals the debtor's carrying amount of the payable.