Question 1

A secured creditor's right to cash proceeds exists for twenty days after re?ceipt only if the cash is forwarded to the secured party.

Accepted Answer

A) True 
 B)False

Question 2

Extenda Loan,Inc. ,takes possession of Flo's stock in Gem Corporation to perfect Extenda's security interest in the stock.This is

Accepted Answer

A) after-acquired property. 
B) a pledge. 
C) a purchase-money security interest. 
D) proceeds. 
A) after-acquired property. 
B) a pledge. 
C) a purchase-money security interest. 
D) proceeds.

Question 3

Under certain conditions,a purchase-money security interest will take priority over a previous creditor's interest in after-acquired property.

Accepted Answer

A) True 
 B)False

Question 4

Manuel holds a security interest in inventory owned by Newt.Manuel assigns his interest in the inventory to Olan.Olan becomes the secured party of record

Accepted Answer

A) automatically. 
B) if Manuel advises Newt of the assignment. 
C) if Olan advises Brad of the assignment. 
D) if Olan files a uniform amendment form. 
A) automatically. 
B) if Manuel advises Newt of the assignment. 
C) if Olan advises Brad of the assignment. 
D) if Olan files a uniform amendment form.

Question 5

To be valid,a financing statement must contain a description of the collateral.

Accepted Answer

A) True 
 B)False

Question 6

On default,unless the security agreement states otherwise,the secured party has the right to repossess collateral.

Accepted Answer

A) True 
 B)False

Question 7

Best Credit Corporation lends funds to Cathy,a consumer,to apply to the cost of a sport utility vehicle (SUV),which is the collateral for the loan.An enforceable security interest requires

Accepted Answer

A) a written agreement and Best's possession of the SUV. 
B) a written agreement or Best's possession of the SUV. 
C) a written agreement only. 
D) Best's possession of the SUV only. 
A) a written agreement and Best's possession of the SUV. 
B) a written agreement or Best's possession of the SUV. 
C) a written agreement only. 
D) Best's possession of the SUV only.

Question 8

A pledge is a promise by a debtor to take reasonable care of the property.

Accepted Answer

A) True 
 B)False

Question 9

After a default,and before a secured party disposes of the collateral,a debtor can exercise the right of redemption.

Accepted Answer

A) True 
 B)False

Question 10

The concept of the floating lien applies to after-acquired inven?tory.

Accepted Answer

A) True 
 B)False

Question 11

A buyer in the ordinary course of business takes goods free of any se?cu?rity interest in the seller's inventory.

Accepted Answer

A) True 
 B)False

Question 12

A financing statement is effective only if it is filed electronically.

Accepted Answer

A) True 
 B)False

Question 13

For a creditor to have an enforceable security interest,the debtor must have title to the collateral.

Accepted Answer

A) True 
 B)False

Question 14

Laser Loan Company has a security interest in collateral owned by Magma Tool & Die Company.A security interest in collateral

Accepted Answer

A) eliminates the need for a financing statement. 
B) is enforceable when attachment occurs. 
C) is lost when attachment occurs. 
D) must be obtained by possession. 
A) eliminates the need for a financing statement. 
B) is enforceable when attachment occurs. 
C) is lost when attachment occurs. 
D) must be obtained by possession.

Question 15

Computer World (CW),after repossessing a multimedia system from Dave,a consumer,decides to keep system instead of reselling it.CW sends written notice to Dave.CW can now keep the system

Accepted Answer

A) only after attempting an unsuccessful public sale of the system. 
B) only after notifying any other appropriate secured party. 
C) unless Dave objects. 
D) under any circumstances. 
A) only after attempting an unsuccessful public sale of the system. 
B) only after notifying any other appropriate secured party. 
C) unless Dave objects. 
D) under any circumstances.

Question 16

Show-Me Display Company,a creditor,agrees to sell display cases to Total Retail,Inc.(TRI).TRI agrees to make monthly payments on the cases,which serves as collateral for the debt until the balance is paid.To protect its claim in the collateral,Show-Me should

Accepted Answer

A) personally contact TRI's other creditors. 
B) file a financing statement with the appropriate state or local offi?cial. 
C) send notice by mail to TRI's potential customers. 
D) station a Show-Me employee on TRI's premises. 
A) personally contact TRI's other creditors. 
B) file a financing statement with the appropriate state or local offi?cial. 
C) send notice by mail to TRI's potential customers. 
D) station a Show-Me employee on TRI's premises.

Question 17

A secured party is a person who owes the payment of a secured obligation.

Accepted Answer

A) True 
 B)False

Question 18

Credit Extender,Inc.(CE),a creditor,wants to perfect its interest in property owned by Dandy Goods,Inc.(DG).Filing a financing statement

Accepted Answer

A) gives notice to other creditors of CE's security interest. 
B) is a technicality that has no practical effect. 
C) reduces CE,on DG's bankruptcy,to an unsecured creditor. 
D) transfers DG's property into CE's possession. 
A) gives notice to other creditors of CE's security interest. 
B) is a technicality that has no practical effect. 
C) reduces CE,on DG's bankruptcy,to an unsecured creditor. 
D) transfers DG's property into CE's possession.

Question 19

A purchase-money security interest in consumer goods is perfected automatically at the time of a credit sale.

Accepted Answer

A) True 
 B)False

Question 20

Fact Pattern 20-1 (Questions 5-7 apply)
Excel Vehicles,Inc. ,makes and sells automobiles to auto dealers,including Fine Auto Sales.Fine sells the cars to consumers and businesses.
-Refer to Fact Pattern 20-1.Holly,a professional driver,buys an Excel from Fine to drive in a Grand Prix race.Holly's Excel is

Accepted Answer

A) a consumer good. 
B) an accession. 
C) equipment. 
D) inventory. 
A) a consumer good. 
B) an accession. 
C) equipment. 
D) inventory.

Exam 20: Security Interest in Personal Property

A secured creditor's right to cash proceeds exists for twenty days after re?ceipt only if the cash is forwarded to the secured party.

Extenda Loan,Inc. ,takes possession of Flo's stock in Gem Corporation to perfect Extenda's security interest in the stock.This is

Under certain conditions,a purchase-money security interest will take priority over a previous creditor's interest in after-acquired property.

Manuel holds a security interest in inventory owned by Newt.Manuel assigns his interest in the inventory to Olan.Olan becomes the secured party of record

To be valid,a financing statement must contain a description of the collateral.

On default,unless the security agreement states otherwise,the secured party has the right to repossess collateral.

Best Credit Corporation lends funds to Cathy,a consumer,to apply to the cost of a sport utility vehicle (SUV),which is the collateral for the loan.An enforceable security interest requires

A pledge is a promise by a debtor to take reasonable care of the property.

After a default,and before a secured party disposes of the collateral,a debtor can exercise the right of redemption.

The concept of the floating lien applies to after-acquired inven?tory.

A buyer in the ordinary course of business takes goods free of any se?cu?rity interest in the seller's inventory.

A financing statement is effective only if it is filed electronically.

For a creditor to have an enforceable security interest,the debtor must have title to the collateral.

Laser Loan Company has a security interest in collateral owned by Magma Tool & Die Company.A security interest in collateral

Computer World (CW),after repossessing a multimedia system from Dave,a consumer,decides to keep system instead of reselling it.CW sends written notice to Dave.CW can now keep the system

Show-Me Display Company,a creditor,agrees to sell display cases to Total Retail,Inc.(TRI).TRI agrees to make monthly payments on the cases,which serves as collateral for the debt until the balance is paid.To protect its claim in the collateral,Show-Me should

A secured party is a person who owes the payment of a secured obligation.

Credit Extender,Inc.(CE),a creditor,wants to perfect its interest in property owned by Dandy Goods,Inc.(DG).Filing a financing statement

A purchase-money security interest in consumer goods is perfected automatically at the time of a credit sale.

The Legal and Constitutional Environment of Business

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International Law in a Global Economy

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Corporate Ownership and Liability in Chilean Firms

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