Put the Following Classes in the Order Allowed by the Bankruptcy

question 37

Multiple Choice

Put the following classes in the order allowed by the Bankruptcy Act, starting with the highest priority to the lowest: ?
1) Expenses to administer estate
2) Tax claims of governmental units
3) Wages (including salaries and commissions) up to $\$ 10,000$ earned within 180 days
4) deposits up to $\$ 1,800$ each for goods or services never received from the debtor

• A)-1,3,4,2
• B)-3,1,2,4
• C)-4,2,1,3
• D)-2,1,3,4

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Definitions:

Intercompany Pre-Tax Profits

Earnings generated from transactions between entities within the same corporation before income taxes have been deducted.

Gross Profit

The financial metric representing the difference between revenue and the cost of goods sold, indicating the basic profitability of a company’s core operations.

Contractual Agreement

A legally binding agreement between two or more parties, typically outlining the terms and conditions of a business transaction or relationship.

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee, recognizing the proportionate share of the investee's net income or loss.