JAMB Accounting 2012 Objective — Question 50

Question 50 of 50 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2012 Objective paper, with the correct answer and a full explanation.

In case of liquidation of a public liability company, those first paid are the

A. ordinary shareholders
B. preference shareholders
C. cumulative preference shareholders
D. debenture holdersCorrect

Explanation

Debenture holders are creditors to the business. They are not part of the owner of the business, thus, they are settled first before any shareholder is settled.

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