Question 1

**Section A**

PrintConstruct, a 3D-printing construction firm, has unfortunately gone into liquidation. The liquidator is distributing the remaining assets.

Which TWO of the following stakeholder groups rank HIGHER than unsecured trade payables in the statutory hierarchy of liquidation?

Accepted Answer

Recall the creditor hierarchy in liquidation: 1. Fixed charge holders, 2. Liquidator fees, 3. Preferential creditors (employees), 4. Floating charge holders, 5. Unsecured creditors, 6. Preference shares, 7. Ordinary shares.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Believing preference shareholders are a type of creditor. They are equity holders and rank below all debt.

Section A

PrintConstruct, a 3D-printing construction firm, has unfortunately gone into liquidation. The liquidator is distributing the remaining assets.

Which TWO of the following stakeholder groups rank HIGHER than unsecured trade payables in the statutory hierarchy of liquidation?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FM — Financial Management Practice Exam 1

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