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Choose the current order of priority in settlement of liabilities and capital upon dissolution from items given below:
(a) Expense incurred on realization of assets such as commission, cartage, brokerage etc.
(b) All outside creditors
(c) Balances in Capital Accounts of partners
(d) Partner’s Loan accounts
Correct sequence is
  • a)
    a, b, d,c
  • b)
    a,c,b,d
  • c)
    a,c,d, b
  • d)
    a,b,c,d
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Choose the current order of priority in settlement of liabilities and ...
The correct order of the payment should be:
(a) Expense incurred on realization of assets such as commission, cartage, brokerage etc.
(b) All outside creditors
(c) Partner’s Loan accounts 
(d) Balances in Capital Accounts of partners
This question is part of UPSC exam. View all Commerce courses
Most Upvoted Answer
Choose the current order of priority in settlement of liabilities and ...
The current order of priority in settlement of liabilities and capital upon dissolution is as follows:

1. Expense incurred on realization of assets such as commission, cartage, brokerage etc. (a)
2. All outside creditors (b)
3. Balances in Capital Accounts of partners (c)
4. Partner (d)
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