Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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What is the primary role of a liquidator?

To oversee the future operations of the company
To take business from directors and sell assets to settle creditors and shareholders
To advise on restructuring options for the company
To manage company investments

The correct answer is: To take business from directors and sell assets to settle creditors and shareholders

The primary role of a liquidator is to take control of a company's assets and liabilities when it is being liquidated, which typically occurs when a company is insolvent or ceases operations. This process involves selling off the company's assets to generate funds that will be used to settle outstanding debts owed to creditors and, if there are any remaining funds, to distribute to shareholders. In this context, the liquidator acts as a representative of the company's creditors and has the duty to ensure that the assets are sold in a manner that maximizes their value and is fair to all parties involved. The liquidation process is essential for the orderly winding down of a company's affairs, which is critical for protecting the interests of creditors while ensuring compliance with legal and regulatory obligations. The other options provided involve functions that are outside the scope of a liquidator's primary role. Overseeing future operations, advising on restructuring options, and managing company investments pertain to management and advisory roles rather than the liquidation process, which focuses on asset sale and debt settlement.