Question 3
Business UnitsUse the information below to answer questions 3 and 4.
Aboki Plc became insolvent and decided to wind up to meet the legitimate claims of its creditors. Babalawee was called in to manage the dissolution.
After paying the debts of Aboki Plc, the balance goes to
- A.Aboki Plc
- B.Babalawee
- C.shareholders
- D.creditors.
Show the answer and explanation
Answer: C (shareholders)
Explanation
In a winding up, whatever is left after creditors are paid is shared among the shareholders, the owners.