| Liquidation Of Companies Interview Questions & Answers - Learning Mode | |
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 CORPORATE ACCOUNTING INTERVIEW QUESTIONS
LIQUIDATION OF COMPANIES INTERVIEW QUESTIONS  QUESTIONS & ANSWERS - LEARNING MODE
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Liquidation Of Companies Interview Questions & Answers - Learning ModeLiquidation is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations as and when they come due. The company's operations are brought to an end, and its assets are shared among creditors and shareholders, according to the priority of their claims. |
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Question: What is creditor's voluntary liquidation?
Answer: A creditors? voluntary liquidation is a process designed to allow an insolvent company to close voluntarily. The decision to liquidate is made by a board resolution, but instigated by the director(s).If a limited company?s liabilities outweigh its assets, or the company cannot pay its bills when they fall due,the company becomes insolvent. Source: CoolInterview.com |
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Question: What is policy for liquidation?
Answer: When a business or firm is terminated or bankrupt, its assets are sold and the proceeds pay creditors. Source: CoolInterview.com |
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Question: What is winding up?
Answer: A winding up order is a Court order that forces an insolvent company into compulsory liquidation ? a process in which the Court appoints an Official Receiver (OR) to liquidate all of the company's assets in order to repay creditors. Source: CoolInterview.com |
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Question: Explain the priority of payment in case of liquidation of company.
Answer: The priority of claims on the company's assets will be determined in the following order: 1)Liquidators cost. 2)Creditors with fixed charge over assets. 3)Costs incurred by an administrator. 4)Amounts owing to employees for wages/superannuation. 5)Payments owing in respect of workers's injuries. 6)Amounts owing to employees for leave. 7)Retrenchment payments owing to employees. 8)Creditors with floating charge over assets. 9)Creditors without security over asse Source: CoolInterview.com |
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Question: What is liquidation store?
Answer: Liquidation sales are a good way to convince yourself that a want is within reach,and therefore a need.The prices aren't that good: When people hear the words "liquidation sale," they assume the main purpose is to get rid of merchandise quickly,meaning cheaply. Source: CoolInterview.com |
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Question: What are the grounds for compulsory liquidation?
Answer: The grounds upon which one can apply for a compulsory liquidation also vary between jurisdictions, but the normal grounds to enable an application to the court for an order to compulsorily wind-up the company are: a)The company has so resolved. b)The company was incorporated as a corporation, and has not been issued with a trading certificate (or equivalent) within 12 months of registration. c)It is an "old public company" (i.e. one that has not re-registered as a public company or beco Source: CoolInterview.com |
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Question: What is Liquidation?
Answer: Liquidation is an event that usually occurs when a company is insolvent,meaning it cannot pay its obligations as and when they come due. The company's operations are brought to an end, and its assets are divvied up among creditors and shareholders,according to the priority of their claims. Source: CoolInterview.com |
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Question: What is voluntary liquidation?
Answer: Voluntary liquidation occurs when the members of a company resolve to voluntarily wind up its affairs and dissolve.Voluntary liquidation begins when the company passes the resolution, and the company generally cease to carry on business at that time (if it has not done so already). Source: CoolInterview.com |
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Question: How is liquidator's remuneration calculated using Percentage On Assets Realized method? Answer: Liquidator's Remuneration= Assets realized X Remuneration Percent/100 Source: CoolInterview.com |
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Question: Name the methods of calculating liquidator's remuneration.
Answer: 1)Percentage On Assets Realized 2)Percentage On Amount Distributed To Unsecured Creditors 3)Percentage On Amount Distributed To Equity Shareholders Source: CoolInterview.com |
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Question: How is liquidators remuneration calculated using Percentage On Amount Distributed To Unsecured Creditors method? Answer: For the computation of the commission, firstly the amount available for payment or surplus must be ascertained in the following way: Amount available for payment = Total receipts - Total payment( up to the payment made to debenture holders)Then amount available may or may not be sufficient for the payment of unsecured creditors amount. If the amount is sufficient, the commission is calculated as follows: Commission = Unsecured creditors X Commission rate/100 If the amount avai Source: CoolInterview.com |
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Question: How is liquidator's remuneration calculated using Percentage On Amount Distributed To Equity Shareholders method? Answer: For the calculation of this commission, firstly the amount available for equity shareholders should be ascertained.For finding out the amount available for equity share holders, the following equation can be used: Amount available = Total receipt - Total Payment ( up to the payment made to preference shareholders) If the amount available is sufficient for the payment of equity share capital amount: Commission = Equity share capital amount X Commission rate/100 If the amount availa Source: CoolInterview.com |
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Question: What is compulsory liquidation?
Answer: The parties who are entitled by law to petition for the compulsory liquidation of a company vary from jurisdiction to jurisdiction,but generally,a petition may be lodged with the court for the compulsory liquidation of a company by: a)The company itself b)Any creditor who establishes a prima facie case. c)Contributories: Those shareholders who may be required to contribute to the company's assets on liquidation. d)The Secretary of State (or equivalent) e)The Official Receiver Source: CoolInterview.com |
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Question: What are the types of liquidation?
Answer: The law classifies liquidations into two types: voluntary (which is by a shareholders' resolution) or compulsory (by a court order). Liquidations are also classified according to whether the company is solvent or insolvent. Source: CoolInterview.com |
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