How to close associated token accounts on a program-owned account?

Question

In my program I am making the program-owned account receive token payments. So I was wondering the following?

Questions:

1. Is there anything wrong with creating associated token accounts (ATAs) on a program-owned account?

2. What happens to the ATAs in the case that I close the program-owned account?

3. Should I always close the ATAs before I close the program-owned account?

Answer 1

To answer your questions:

1. There's certainly nothing wrong with this! DeFi application are often built using token accounts owned by program-owned accounts
2. The ATAs must be closed by the account that owns them or by a designated "close authority", so even if you close the program-owned account, if the account is on a program-derived address, your program can still close them. The ATAs will not be closed automatically, however.
3. Order doesn't really matter, as long as you can sign for the program-owned account.