TrueFalse

1.A debt restructuring is a method of dealing with a troubled company that may or

may not be part of a court-approved plan. __X__________

2.If in a troubled debt restructuring assets are transferred to creditors in full settlement

of a debt, a gain is recognized to the extent that the fair market value of the assets

transferred is less than the basis of the debt. __X__________

3.a debt restructuring that involves a modification of terms and does not require court

approval may not require the recognition of subsequent interest expense. __________X__

4.Interest expense associated with a modification or terms under a debt restructuring

is measured differently, depending on whether or not the modification is part of a

plan under a Chapter 11 recognition. _________X_

5.In a quasi-reorganization, if paid-in-capital excess of par value is not sufficient to

absorb a deficit in retained earnings, the par value for stock may be reduced. ___X________

6.A reorganization under Chapter 11 of the Bankruptcy Code Amendments will be

approved by the courts even if creditors receive less than would be the case with a

Chapter 7 liquidation. ____________

7.Under the Bankruptcy Code, a reorganization may be either voluntary or involuntary,

yet a liquidation may only be voluntary. ____________

8.A Chapter 11 reorganization plan must be approved by those creditors representing at

least one-half of the total dollar amount due that class. ____________

9.Under a corporate liquidation, all unsecured creditors have an equal rights to claim

available assets of the corporation. ____________

10.A statement of affairs measures a deficiency - traceable to unsecured creditors without

priority - as the difference between the estimated net realizable value of the assets and

the amount due those creditors. ____________

11.The dividend to general unsecured creditors is the dividend rate declared on common

stock multiplied by the amount due to unsecured creditors. ____________

12.The statement of realization and liquidation reports the actual results of a liquidation

whereas a statement of affairs reports estimated results. ____________

13.Bankruptcy is covered under SOP 90-7 ____________

14.Continuousdeficits in retained earnings is an indication of a business heading into

bankruptcy. ____________

15.Available assets for debt restructuring are identified under three situations ____________

16.A court will appoint a trustee. ____________

17.The restructuring of a debt is set forth in FASB ASC 470. ____________

18.Chapter 13 relates to individuals. ____________

19.Troubled debt may be restructured ______ ______

20.Z-score is a method used to predict bankruptcy. __X_________