When a firm agrees to a complete distribution of its assets to creditors,most of whom will receive a small fraction of the amount that they are owed,this form of bankruptcy is called a:
A) Reorganization bankruptcy
B) Liquidation bankruptcy
C) Partial bankruptcy
D) Organizational bankruptcy

Question

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When a firm agrees to a complete distribution of its assets to creditors, most of whom will receive a small fraction of the amount they are owed, this is a form of bankruptcy known as liquidation bankruptcy. In this type of bankruptcy, the firm's assets are sold off, and the proceeds are used to pay off creditors. If there is any money left over after all the creditors have been paid, it is given to the shareholders of the firm.

When a Firm Agrees to a Complete Distribution of Its