16 - Chapter 16 Bankruptcy, Divorce, and Tax Fraud MULTIPLE...

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Chapter 16 Bankruptcy, Divorce, and Tax Fraud MULTIPLE CHOICE 1. All bankruptcy petitions are subject to a. Federal claims court jurisdiction b. U.S. Tax court jurisdiction c. Supreme court jurisdiction d. U.S. district court jurisdiction ANS: D: Correct 2. Which of the following describes the result of a Chapter 7 filing? a. "a complete liquidation or shutting down of the business" b. "courts give debtor time to reorganize" c. "2 years probation and/or up to 300 hours community service" d. "Debtors make regular payments for a number of years:" ANS: A: Correct; under Chapter 7, the bankruptcy involves a complete sale or liquidation of all assets and the proceeds are used to pay creditors 3. When a bankrupt company only listed address and phone number as a post office box and an answer- ing service, we may see this as a flag of what type of fraud? a. Illegal concealment of assets b. Planned bankruptcy fraud c. Fraudulent transfers d. None of the above ANS: B: Correct 4. The Office of U.S. Trustee is an agency in which of the following departments? a. Homeland Defense b. Department of Justice c. Department of the Treasury d. Department of Agriculture ANS: B: Correct 5. The Office of U.S. Trustee is responsible for all but which of the following functions? a. Administering bankruptcy cases b. Officiating in court on matters of interest to the debtor’s estate and creditors c. Overseeing and monitoring trustees d. Reviewing employees and fee applications e. The Office of U.S. Trustee is responsible for all of the above functions ANS: B A: Incorrect; this is a function of the Office of U.S. Trustee B: Correct; the office of U.S. Trustee sometimes appears in such courts, but they do not officiate in them. C: Incorrect; this is a function of the Office of U.S. Trustee D: Incorrect; this is a function of the Office of U.S. Trustee E: Incorrect
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6. Section 548 of the Bankruptcy Code defines as fraudulent certain transfers made, or obligations in- curred, within ______ month(s) before the bankruptcy petition’s filing date? a. 12 b. 9 c. 6 d. 3 e. 1 ANS: A: Correct; fraudulent transfers are those made within 1 year of a bankruptcy petition’s filing date 7. Most divorce fraud cases are: a. Civil cases. b. Criminal cases. c. Protected by Chapter 7. d. Rarely investigated through surveillance. ANS: A B: Only for egregious fraudulent acts are criminal charges filed. C: This is a bankruptcy term - not a divorce term. D: Surveillance is a common method of investigating divorce fraud. 8. When fraud examiners investigate a bankruptcy or divorce resulting from fraud where do they focus? a. Activity shortly before the bankruptcy filing or divorce b. Activity after the bankruptcy filing or divorce c. Activity several years prior to the bankruptcy filing or divorce d. Activity throughout the individual's entire life ANS: A A: Correct; it is at this stage where most assets are hidden and fraud is perpetrated 9. Fraud is common in: a. Divorces b. Bankruptcies c. Both A and B
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This note was uploaded on 01/31/2011 for the course ACCT 345 taught by Professor N/a during the Spring '10 term at Mountain State.

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16 - Chapter 16 Bankruptcy, Divorce, and Tax Fraud MULTIPLE...

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