Practice Quiz

Forensic Accounting

Category - Fundamental Forensic Knowledge

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An equity cushion is:
  1. Amount of equity on the statement of financial position
  2. Amount of equity invested
  3. Amount ordered by the court to be paid to the aggrieved party
  4. Excess value in property that serves to protect creditors from incurring loss during the course of stay
Explanation
Answer: D - Equity cushion is the excess value in property above the claimed amount, which serves to protect creditors from incurring loss during the course of stay.
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