In your own opinion, what would be the out come or consequences if a debtor failed to settle thier account?

Q: Why do creditors usually accept a plan for financial rehabilitation ratherthan demand liquidation of…

A: Financial rehabilitation: Financial liquidation is mechanism whereby the corporation sells its…

Q: (a) In a troubled-debt situation, why might the creditorgrant concessions to the debtor?(b) What…

A: (a)The creditor mostly grants the borrower with certain concessions with regard to the settlement.…

Q: What percentage of their claims are the unsecured creditors likely to get?

A:

Q: What type of concessions might a creditor grant the debtor in a troubled-debt situation?

A: Debt is the amount owed by the company for a particular period from the date of the company's…

Q: Dishonoring a note means the maker no longer has to pay. True or False?

A: Dishonoring a note means that note has not been paid on the date of maturity. This does not payor no…

Q: Unsecured creditors: have rights to be paid amounts owed, but the rights may have to be enforced…

A: Correct option is 1. i.e unsecured creditors have rights to be paid amounts owed, but the rights may…

Q: Describe about bad debts.

A:

Q: Regarding accounting for troubled debt, the three  statements that are not true are the following...…

A: Troubled debt restructuring refers to that debt restructuring when a creditor takes into…

Q: Which of the following statements is false? In order to claim a bad debt deduction:   a. There…

A: Bad debt expense refers to the expense that is recognized when there is no chance to recover the…

Q: Early extinguishment of debt often produces a gain or a loss. How is the gain or loss determined?

A:

Q: What are some different methods that can be used for customer returns/bad debt? which way do you…

A: Solution: The customer returns can be accounted through two method: One is directly debiting the…

Q: Vhich of the following is not a credit ev O loan refinancing O bankruptcy O default O debt downgrade

A: Credit default swaps are derivative contract that are done between the the parties and done to…

Q: Assuming the borrower is in no danger of default, under what conditions might a lender be willing to…

A: There can be majorly two possibilities under which a lender may accept a lesser amount than that of…

Q: What are the risks to the lender if a borrower declares bankruptcy?

A: Bankruptcy refers to a condition in which a borrower (business or an individual) is unable to pay…

Q: A troubled debt restructuring is a situation in which * O the debtor has clearly demonstrated an…

A: Troubled debt restructuring represents the situation where the debtor is facing economic…

Q: Explain the methods of estimating bad debts ?

A: Bad Debt: A loan or outstanding sum that is no longer considered collectable and must be wiped off…

Q: What is a bad debt

A: Solution:- Bad debt definition:- Companies sell products to customers on credit or cash basis. Bad…

Q: What is holdout problem (in bankruptcy)?

A: Bankruptcy is the situation where the individual or the company becomes unable to pay its debt…

Q: Who is more likely to record a loss from debt restructuring? A. depends on the situation…

A: Debt Restructuring: Debt restructuring is the process of settlement of Loan between debtor or…

Q: What are the instances when the debtor loses the benefit of the period? Explain by giving examples…

A: When a period for the performance or fulfillment of an obligation is agreed upon, it is believed to…

Q: difference between debt and quity

A: A company’s capital consists of two forms, one is equity and the other is debt. When a company is…

Q: Which of the following is an arrangement by which one party promises to pay a sum of money to…

A: Insurance is a contract between two parties where one party i,e policy holder pays a premium to…

Q: measuring and recognizing impairment loss on receivables?

A: A is correct because the analysis of past experience gives the estimate of impairment loss on…

Q: If the shareholder’s position is not protected by a contract – unlike the provider of debt- how is…

A: The shareholders have ownership of the company. The providers of debt are the creditors of the…

Q: If someone owes you money, that person or business goes into bankruptcy why would it make a…

A: Introduction:- Bankruptcy is a legal process that involves a person or company that is unable to pay…

Q: What are some of the ways to estimate bad debts?

A: There are 2 basic methods namely 1. Percentage of sales method 2. Percentage of receivable method…

Q: Which of the following is the correct journal entry to write off a debtor who has been declared as…

A: The journal entry to write off a debtor who has been declared as bankrupt is as follows :

Q: Before a person's discharge from bankruptcy, are their any legal restrictions on such a person's…

A: Credit: When you have credit, you have the capacity to borrow money, purchase things, or get…

Q: Why does the use of debt lower ROA?

A: Introduction: Debt can be characterised as an amount or sum owned by a person to another for…

Q: Why debtors control should always stay on debtor's control?

A: Debtor is the customer that has purchased goods and services on credit and owes money to the seller…

Q: What are the general rules for measuring gain or loss byboth creditor and debtor in a troubled-debt…

A: Rules for measuring gain or loss by creditor in a troubled-debt restructuring involving a…

Q: How important is the ability to borrow money from an individual and what is the primary risk of…

A: Borrowing money is the act of obtaining money from the lender in order to fulfill a financial goal…

Q: Explain the 5 C’s that creditors look for in borrowers. Which ones are the most important?  Which…

A: A borrower is an individual or an institution that borrows money or loan from the lender for a…

Q: Account of a debtor must be written off as irrecoverable..what is a document of this transaction?

A: The transactions of the company will be analyzed by the management, and it will be recorded in…

Q: What is the main purpose of loan loss provisioning? Explain the concepts of incurred loss model and…

A: The loan loss provision is the cash reserve created by the banks for the future credit risk. The…

Q: In a troubled-debt situation, why might the creditor grant concessions to the debtor?

A: Creditor: Creditor is a person or a company who has provided fund or loan, and hence, have a claim…

Q: Which of the following does not relate to credit risks?  a. Credit risk is the possibility of losing…

A: First of all we need to understand the meaning of Credit risk- Credit risk is the probability of…

Q: In your own opinion what would be the outcome or consequences if a debtor failed to settle thier…

A: A debt default happens when the borrower fails to pay the money back to the lender at the time when…

Q: What are bad debts?

A: Debts that a company or person is unable to be likely to recover are known as doubtful debts.…

Q: What is meant by bad debts recovery? Give two illustrative example.

A: Bad debt refers to loans or outstanding balances owed that are no recoverable and must be written…

Q: Then what was the difference between a creditor and a debtor?

A: In normal course of business goods are sold and Purchased in cash and on account. Every business has…

Q: What may a person lose in addition to the good if he fails to keep up the payment on a personal…

A: Personal loan : The personal loan can be understood as the sum of funds for a number of uses that…