Assuming All of the Following Expenses Have Priority, in What

question 25

Multiple Choice

Assuming all of the following expenses have priority, in what order are they prioritized?

• A) Administrative expenses, employee claims for wages, unpaid taxes, claims for the return of customer deposits.
• B) Employee claims for wages, unpaid taxes, administrative expenses, claims for the return of customer deposits.
• C) Unpaid taxes, administrative expenses, employee claims for wages, return of customer deposits.
• D) Administrative expenses, employee claims for wages, claims for the return of customer deposits, unpaid taxes.
• E) Unpaid taxes, return of customer deposits, employee claims for wages, administrative expenses.

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Definitions:

Dividends

Funds disbursed by a company to its members who hold shares, generally sourced from the company's income.

EBIT

Excluding interest and tax payments, Earnings Before Interest and Taxes provides an assessment of a firm's economic performance.

Leverage

The use of borrowed money (debt) to amplify the potential return on investment.

EAT

Earnings After Tax, which refers to the net profit a company makes after deducting all its costs, including taxes.