JAMB Commerce 2022 Objective — Question 7

Question 7 of 40 from the Joint Admissions and Matriculation Board (JAMB) Commerce 2022 Objective paper, with the correct answer and a full explanation.

7. When a firm liquidates, ______ are first settled

A. (A) Redeemable shareholders
B. (B) Debenture holdersCorrect
C. (C) Ordinary shareholders
D. (D) Founders shareholders

Explanation

Debenture holders are creditors to the organization, as against shareholders, who are owners of the organization; creditors are settled first.

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