In Relation to the Order of Priority of Payment of Debts

question 21

Multiple Choice

In relation to the order of priority of payment of debts upon liquidation, which statement is correct?

• A) Ordinary unsecured creditors are paid before preferential unsecured creditors.
• B) Preferential unsecured creditors are paid before deferred creditors.
• C) Deferred creditors are paid before ordinary unsecured creditors.
• D) Deferred creditors are paid before secured creditors.

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Definitions:

Disposable Income

Fiscal resources for households' utilization in spending and saving post income tax processing.

Consumption

The employment of goods and services by domestic units.

Savings

The portion of disposable income not spent on consumption of goods and services, set aside for future use or for investment.

Disposable Income

The financial resources available to a household for saving and spending after subtracting income taxes.