Question

Any sum due to an employee out of provident fund is an example of ________

Answer 1

Unsecured creditor
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Answer 2

It is an example of a Preferential creditor.

• Employees and many revenue authorities are generally considered as preferred creditors
• Section 326 lays down the various amounts which are payable to an employee on a priority basis including various other dues.

• The sum owed to any employee from the firm's provident fund, or pension fund, or any other fund for the employee's betterment are to be paid to the employee.