Arrange the following parties in the order in which they will be paid in the event of dissolution of firm.
1) Secured Creditors
2) Unsecured Creditors
3) Partners who have granted loans
4) Partners who have contributed over and above profit sharing ratio.
Select the correct answer using the codes given below

1,2,3,4

Secured creditors are often banks and other asset based lenders. They have preferential right over asset. so they are paid first. Unsecured creditors include trade creditors,suppliers. They are paid from the asset left after paying to secured creditors. After paying to all the outside parties partners are paid. Loan granted by partners are paid next because loan is a charge on profit. In last partners who have contributed over and above profit sharing ratio are paid.