What Would Be the Priority of the Claims as to the Distribution

question 3

Multiple Choice

What would be the priority of the claims as to the distribution of assets in a liquidation under Chapter 7 of the Bankruptcy Act? 1 is the highest claim, 5 is the lowest.
(1) Trustees' costs to administer and operate the firm.
(2) Common stockholders.
(3) General, or unsecured, creditors.
(4) Secured creditors, who have a claim to the proceeds from the sale of specific property pledged to secure a loan.
(5) Taxes due to federal and state governments.

• A) 5, 4, 1, 3, 2
• B) 4, 1, 5, 3, 2
• C) 5, 1, 4, 2, 3
• D) 1, 5, 4, 3, 2
• E) 1, 4, 3, 5, 2

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Definitions:

Centration

A cognitive limitation in early child development where the child focuses on one aspect of a situation, neglecting other important features.

Egocentrism

The inability to differentiate between one's own viewpoint and that of others, often observed in early childhood development.

Conservation

The understanding that certain properties of objects or substances remain the same even when their appearances change, a concept crucial in cognitive development.

Preconventional Level

Refers to the first level in Kohlberg's stages of moral development, characterized by an individual's moral reasoning that is based largely on external consequences and rewards.