Question 1

After-acquired property refers to the proceeds received from the disposition of the collateral.

Accepted Answer

A) True 
 B)False  False

Question 2

Goods, other than farm products, held by a person for sale or lease or consisting of raw materials, works in progress, or material consumed in a business are known as:

Accepted Answer

A)  inventories. 
B)  consumer goods. 
C)  equipment. 
D)  fixtures. 
E)  accessions. 
A)  inventories. 
B)  consumer goods. 
C)  equipment. 
D)  fixtures. 
E)  accessions. A

Question 3

A person who owes money or a duty of performance to another is known as an):

Accepted Answer

A)  obligor. 
B)  creditor. 
C)  pledger. 
D)  bailer. 
E)  debtor. 
A)  obligor. 
B)  creditor. 
C)  pledger. 
D)  bailer. 
E)  debtor. E

Question 4

An assurance, generally purchased by an employer, to cover employees who are entrusted with valuable property or funds is known as a _____ bond.

Accepted Answer

A)  codicil 
B)  fidelity 
C)  judicial 
D)  performance 
E)  chattel 
A)  codicil 
B)  fidelity 
C)  judicial 
D)  performance 
E)  chattel

Question 5

If a security interest was not perfected at the time of filing for bankruptcy, a bankruptcy trustee cannot take the collateral.

Accepted Answer

A) True 
 B)False

Question 6

Accessions are goods that are physically united with other goods in such a manner that the identity of the original good is lost.

Accepted Answer

A) True 
 B)False

Question 7

A chattel mortgage refers to a debt secured against land, buildings, and fixtures.

Accepted Answer

A) True 
 B)False

Question 8

The process by which a security interest becomes enforceable against the debtor with respect to the collateral is known as:

Accepted Answer

A)  foreclosure. 
B)  attachment. 
C)  perfection. 
D)  exoneration. 
E)  subrogation. 
A)  foreclosure. 
B)  attachment. 
C)  perfection. 
D)  exoneration. 
E)  subrogation.

Question 9

A lien that is expanded to cover any additional property that is acquired by the debtor while the debt is outstanding is known as a:

Accepted Answer

A)  tax lien. 
B)  possessory lien. 
C)  floating lien. 
D)  blanket lien. 
E)  judgment lien. 
A)  tax lien. 
B)  possessory lien. 
C)  floating lien. 
D)  blanket lien. 
E)  judgment lien.

Question 10

What are the three different types of suretyship?

Accepted Answer

The three different types of suretyship

Question 11

A surety bond that ensures a property owner of the completion of a construction contract or payment of actual damages to the extent of the bond in the event that the contractor fails to complete it is called a _____ bond:

Accepted Answer

A)  judicial 
B)  fidelity 
C)  chattel 
D)  codicil 
E)  performance 
A)  judicial 
B)  fidelity 
C)  chattel 
D)  codicil 
E)  performance

Question 12

Which of the following is true of the rule of priorities regarding the disposal of a debtor's property when the debtor defaults?

Accepted Answer

A)  Persons who become lien creditors before or after the security interest is perfected win. 
B)  If the security interest was perfected at the time of filing for bankruptcy, the bankruptcy trustee can take the collateral. 
C)  The Bankruptcy Act provides that a bankruptcy trustee can avoid a transfer of an interest of the debtor in property to or for the benefit of a creditor. 
D)  A perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods. 
E)  A mortgage has priority over a perfected security in fixtures, even if the security interest is a purchase-money security interest. 
A)  Persons who become lien creditors before or after the security interest is perfected win. 
B)  If the security interest was perfected at the time of filing for bankruptcy, the bankruptcy trustee can take the collateral. 
C)  The Bankruptcy Act provides that a bankruptcy trustee can avoid a transfer of an interest of the debtor in property to or for the benefit of a creditor. 
D)  A perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods. 
E)  A mortgage has priority over a perfected security in fixtures, even if the security interest is a purchase-money security interest.

Question 13

A creditor stuck holding a promissory note with only a signature loan will get nothing if the debtor is insolvent.

Accepted Answer

A) True 
 B)False

Question 14

If, at a time a surety's obligation has matured, the principal can satisfy the obligation but refuses to do so, the surety is entitled to a court order requiring the principal to perform. This is known as:

Accepted Answer

A)  contribution. 
B)  perfection. 
C)  foreclosure. 
D)  exoneration. 
E)  subrogation. 
A)  contribution. 
B)  perfection. 
C)  foreclosure. 
D)  exoneration. 
E)  subrogation.

Question 15

The property given as security for a debt is known as a:

Accepted Answer

A)  proceed. 
B)  lien. 
C)  mortgage. 
D)  collateral. 
E)  pledge. 
A)  proceed. 
B)  lien. 
C)  mortgage. 
D)  collateral. 
E)  pledge.

Question 16

Security obtained through operation of law is known as a:

Accepted Answer

A)  pledge. 
B)  bequest. 
C)  lien. 
D)  collateral. 
E)  mortgage. 
A)  pledge. 
B)  bequest. 
C)  lien. 
D)  collateral. 
E)  mortgage.

Question 17

The situation where the creditor takes the collateral, discharges the debtor, and has no right to seek any deficiency is known as:

Accepted Answer

A)  exoneration. 
B)  blockbusting. 
C)  subrogation. 
D)  presentment. 
E)  strict foreclosure. 
A)  exoneration. 
B)  blockbusting. 
C)  subrogation. 
D)  presentment. 
E)  strict foreclosure.

Question 18

A lien creditor is a creditor whose claim is based on operation of law as opposed to a creditor whose claim is based on agreement.

Accepted Answer

A) True 
 B)False

Question 19

A surety is a person who promises to pay or perform an obligation owed by the guarantor.

Accepted Answer

A) True 
 B)False

Question 20

A person who promises to act or pay upon the default of another is known as an):

Accepted Answer

A)  surety. 
B)  debtor. 
C)  payee. 
D)  obligor. 
E)  pledger. 
A)  surety. 
B)  debtor. 
C)  payee. 
D)  obligor. 
E)  pledger.

Exam 33: Secured Transactions and Suretyship

After-acquired property refers to the proceeds received from the disposition of the collateral.

Goods, other than farm products, held by a person for sale or lease or consisting of raw materials, works in progress, or material consumed in a business are known as:

A person who owes money or a duty of performance to another is known as an):

An assurance, generally purchased by an employer, to cover employees who are entrusted with valuable property or funds is known as a _____ bond.

If a security interest was not perfected at the time of filing for bankruptcy, a bankruptcy trustee cannot take the collateral.

Accessions are goods that are physically united with other goods in such a manner that the identity of the original good is lost.

A chattel mortgage refers to a debt secured against land, buildings, and fixtures.

The process by which a security interest becomes enforceable against the debtor with respect to the collateral is known as:

A lien that is expanded to cover any additional property that is acquired by the debtor while the debt is outstanding is known as a:

What are the three different types of suretyship?

A surety bond that ensures a property owner of the completion of a construction contract or payment of actual damages to the extent of the bond in the event that the contractor fails to complete it is called a _____ bond:

Which of the following is true of the rule of priorities regarding the disposal of a debtor's property when the debtor defaults?

A creditor stuck holding a promissory note with only a signature loan will get nothing if the debtor is insolvent.

If, at a time a surety's obligation has matured, the principal can satisfy the obligation but refuses to do so, the surety is entitled to a court order requiring the principal to perform. This is known as:

The property given as security for a debt is known as a:

Security obtained through operation of law is known as a:

The situation where the creditor takes the collateral, discharges the debtor, and has no right to seek any deficiency is known as:

A lien creditor is a creditor whose claim is based on operation of law as opposed to a creditor whose claim is based on agreement.

A surety is a person who promises to pay or perform an obligation owed by the guarantor.

A person who promises to act or pay upon the default of another is known as an):

Introduction to Law and Legal Systems

Corporate Social Responsibility and Business Ethics

Courts and the Legal Process

Constitutional Law and Us Commerce

Administrative Law

Criminal Law

Introduction to Tort Law

Introduction to Contract Law

The Agreement

Real Assent

Consideration

Legality

Form and Meaning

Third-Party Rights

Discharge of Obligations

Remedies

Products Liability

Intellectual Property

Insurance

Relationships Between Principal and Agent

Liability of Principal and Agent; Termination of Agency

Partnerships: General Characteristics and Formation

Partnership Operation and Termination

Hybrid Business Forms

Corporation: General Characteristics and Formation

Legal Aspects of Corporate Finance

Corporate Powers and Management

Securities Regulation

Corporate Expansion, State and Federal Regulation of Foreign Corporations, and Corporate Dissolution

Employment Law

Labor-Management Relations

Consumer Credit Transactions

Mortgages and Nonconsensual Liens

Bankruptcy

Introduction to Property: Personal Property and Fixtures

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