Question

Arrange the following in a sequence in which amount realised from Assets will be utilized to pay: 
A. Partner's Loan 
B. Partner's Capital 
C. Secured debts of the firm 
D. Unsecured debts of the firm 
E. Residue to partners 
Choose the correct answer from the options given below:

• A. C, D, E, A, B
• B. C, D, E, B, A
• C. C, D, A, B, E
• D. C, D, A, E, B

Hint:

In liquidation, secured creditors paid first, then unsecured, then partners' loans and capital, residue to partners.

Answer 1

The Correct Option is C

Step 1: Payment Hierarchy
Prioritized payments begin with secured debts (C), followed by unsecured debts (D). 
Next, partner loans (A), which rank higher than capital contributions, are settled.
Partner capital (B) is paid thereafter.
Any remaining assets are distributed among partners (E).
Step 2: Determination 
The established payment sequence is: C, D, A, B, E.