Accounting · Corporate Accounting
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: During the liquidation of a company, standard unsecured creditors, such as suppliers and contractors, are legally granted a higher priority for repayment over employees owed unpaid wages. Reason R: Employees owed unpaid wages are classified as preferential creditors under winding-up provisions, whereas suppliers and contractors are general unsecured creditors. In the light of the above statements, choose the correct answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is not correct but R is correct✓
- 2A is correct but R is not correct
- 3Both A and R are correct but R is NOT the correct explanation of A
- 4Both A and R are correct and R is the correct explanation of A
Correct answer
A is not correct but R is correct
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