Multiple choice

On sale of security asset, the sale proceeds are appropriated firstly towards

  1. the satisfaction of dues of secured creditor

  2. the payment of dues of labour

  3. payment of cost, charges and expenses for the preservation and protection of securities, insurance premiums etc

  4. payment of legal costs incurred by the creditor for taking possession and for effecting sale
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When sale of secured asset is made, the appropriation of sale proceeds realised are required to be made. Firstly, towards costs, charges and expenses incidental towards preservation and protection of securities, insurance premiums etc. that are recoverable from the borrower. Secondly, towards the due of the secured creditors. Thirdly, if there is any surplus, it will be paid to the person entitled thereto in accordance with the right and interests.

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