Question 1

A security interest is enforceable only if the debtor has title to the collateral.

Accepted Answer

A) True 
 B)False

Question 2

A security interest that provides for a security interest in collateral subject to future advances is a floating lien.

Accepted Answer

A) True 
 B)False

Question 3

A security interest cannot be perfected without the filing of a financing statement.

Accepted Answer

A) True 
 B)False

Question 4

Ken's Auto Sales borrows money from Lenders Finance Corporation under a security agreement. With the money, Ken's buys six Mazda Miatas. The vehicles are​

Accepted Answer

A)  ​beyond the extent of Lenders's interest. 
B)  ​after-acquired property. 
C)  ​a future advance. 
D)  ​proceeds.

Question 5

The concept of a floating lien applies to a constantly changing inventory.

Accepted Answer

A) True 
 B)False

Question 6

A financing statement must include the creditor's signature.

Accepted Answer

A) True 
 B)False

Question 7

A security interest cannot become perfected unless a financing statement is filed.

Accepted Answer

A) True 
 B)False

Question 8

Any breach of the terms of the security agreement can constitute default.

Accepted Answer

A) True 
 B)False

Question 9

Credit Financing, Inc., and Equity Lending Company are secured parties with security interests in property owned by Fleet Shipping Corporation. Priority between these security interests is generally determined by​

Accepted Answer

A)  ​the amount of the claim. 
B)  ​the custom in the trade. 
C)  ​the time of perfection or attachment. 
D)  ​the "float" of the liens.

Question 10

Metro Motors files a financing statement giving notice to the public that it has a secured interest in collateral belonging to Nate's Limousine Service, which is the debtor named in the statement. A uniform financing statement used in all states is​

Accepted Answer

A)  ​the UCC Financing Statement. 
B)  ​the UCC Collateral Form. 
C)  ​Form UCC-2. 
D)  ​none of the choices.

Question 11

Market Credit Corporation is the secured party in a secured transaction with Northwest Outfitters. Market Credit could also be referred to as​

Accepted Answer

A)  ​the debtor. 
B)  ​the secured creditor. 
C)  ​the security interest. 
D)  ​the filing officer.

Question 12

Bagels Café defaults on debts to Country Bank and Hillside Loan Company. Country Bank perfected its security interest before Hillside. The bank takes possession of the collateral in which it has a security interest. On a sale of the collateral, the proceeds will be applied first to​

Accepted Answer

A)  ​the debtor's previous payments on the debts. 
B)  ​the debtor's unpaid payments on the debts. 
C)  ​the balance of the debtor's debt to Country Bank. 
D)  ​the balance of the debtor's debt to Hillside Loan.

Question 13

Whatever a secured party obtains on a sale of collateral is all that he or she can collect on the debt.

Accepted Answer

A) True 
 B)False

Question 14

Most of the customers in any business are buyers in the ordinary course of business.​

Accepted Answer

A) True 
 B)False

Question 15

Fiona borrows $1,000 from Garden State Bank, using her recreational vehicle (RV), which she purchased at Hugo's RV Sales & Service, as collateral. To perfect its security interest, the bank must file its financing statement with​

Accepted Answer

A)  ​the secretary of state. 
B)  ​the county clerk. 
C)  ​the city treasurer. 
D)  ​Hugo's RV.

Question 16

A financing statement is effective for five years from the date of filing.

Accepted Answer

A) True 
 B)False

Question 17

Sara needs $1,500 to buy textbooks and other school supplies. Tomas agrees to loan Sara $1,500, accepting as collateral Sara's car. They put their agreement in writing and sign it. Sara keeps possession of the car. Does Tomas have an enforceable security interest? How can Tomas let other creditors know of his interest in the car?

Accepted Answer

The answer of Sara needs $1,500 to buy textbooks and...

Question 18

Capital Projects, Inc., files a financing statement to provide notice of its security interest in the property of Data Network Corporation. The initial effective term of a financing statement is a period of​

Accepted Answer

A)  ​five days. 
B)  ​five months. 
C)  ​five weeks. 
D)  ​five years.

Question 19

Authenticate means to sign or to adopt any symbol on an electronic record that verifies the intent to adopt or accept the record.

Accepted Answer

A) True 
 B)False

Question 20

Jones lives in Illinois, but works in Indiana. Jones borrows $1,000 from Heartland Bank, using her car as collateral. To perfect its security interest, the bank must file its financing statement in at least​

Accepted Answer

A)  ​every state. 
B)  ​Illinois. 
C)  ​Illinois and Indiana. 
D)  ​Indiana.

Exam 30: Secured Transactions

A security interest is enforceable only if the debtor has title to the collateral.

A security interest that provides for a security interest in collateral subject to future advances is a floating lien.

A security interest cannot be perfected without the filing of a financing statement.

Ken's Auto Sales borrows money from Lenders Finance Corporation under a security agreement. With the money, Ken's buys six Mazda Miatas. The vehicles are

The concept of a floating lien applies to a constantly changing inventory.

A financing statement must include the creditor's signature.

A security interest cannot become perfected unless a financing statement is filed.

Any breach of the terms of the security agreement can constitute default.

Credit Financing, Inc., and Equity Lending Company are secured parties with security interests in property owned by Fleet Shipping Corporation. Priority between these security interests is generally determined by

Metro Motors files a financing statement giving notice to the public that it has a secured interest in collateral belonging to Nate's Limousine Service, which is the debtor named in the statement. A uniform financing statement used in all states is

Market Credit Corporation is the secured party in a secured transaction with Northwest Outfitters. Market Credit could also be referred to as

Bagels Café defaults on debts to Country Bank and Hillside Loan Company. Country Bank perfected its security interest before Hillside. The bank takes possession of the collateral in which it has a security interest. On a sale of the collateral, the proceeds will be applied first to

Whatever a secured party obtains on a sale of collateral is all that he or she can collect on the debt.

Most of the customers in any business are buyers in the ordinary course of business.

Fiona borrows $1,000 from Garden State Bank, using her recreational vehicle (RV) , which she purchased at Hugo's RV Sales & Service, as collateral. To perfect its security interest, the bank must file its financing statement with

A financing statement is effective for five years from the date of filing.

Capital Projects, Inc., files a financing statement to provide notice of its security interest in the property of Data Network Corporation. The initial effective term of a financing statement is a period of

Authenticate means to sign or to adopt any symbol on an electronic record that verifies the intent to adopt or accept the record.

Jones lives in Illinois, but works in Indiana. Jones borrows $1,000 from Heartland Bank, using her car as collateral. To perfect its security interest, the bank must file its financing statement in at least

Exam 30: Secured Transactions

A security interest is enforceable only if the debtor has title to the collateral.

A security interest that provides for a security interest in collateral subject to future advances is a floating lien.

A security interest cannot be perfected without the filing of a financing statement.

Ken's Auto Sales borrows money from Lenders Finance Corporation under a security agreement. With the money, Ken's buys six Mazda Miatas. The vehicles are​

The concept of a floating lien applies to a constantly changing inventory.

A financing statement must include the creditor's signature.

A security interest cannot become perfected unless a financing statement is filed.

Any breach of the terms of the security agreement can constitute default.

Credit Financing, Inc., and Equity Lending Company are secured parties with security interests in property owned by Fleet Shipping Corporation. Priority between these security interests is generally determined by​

Metro Motors files a financing statement giving notice to the public that it has a secured interest in collateral belonging to Nate's Limousine Service, which is the debtor named in the statement. A uniform financing statement used in all states is​

Market Credit Corporation is the secured party in a secured transaction with Northwest Outfitters. Market Credit could also be referred to as​

Bagels Café defaults on debts to Country Bank and Hillside Loan Company. Country Bank perfected its security interest before Hillside. The bank takes possession of the collateral in which it has a security interest. On a sale of the collateral, the proceeds will be applied first to​

Whatever a secured party obtains on a sale of collateral is all that he or she can collect on the debt.

Most of the customers in any business are buyers in the ordinary course of business.​

Fiona borrows $1,000 from Garden State Bank, using her recreational vehicle (RV) , which she purchased at Hugo's RV Sales & Service, as collateral. To perfect its security interest, the bank must file its financing statement with​

A financing statement is effective for five years from the date of filing.

Capital Projects, Inc., files a financing statement to provide notice of its security interest in the property of Data Network Corporation. The initial effective term of a financing statement is a period of​

Authenticate means to sign or to adopt any symbol on an electronic record that verifies the intent to adopt or accept the record.

Jones lives in Illinois, but works in Indiana. Jones borrows $1,000 from Heartland Bank, using her car as collateral. To perfect its security interest, the bank must file its financing statement in at least​

Ken's Auto Sales borrows money from Lenders Finance Corporation under a security agreement. With the money, Ken's buys six Mazda Miatas. The vehicles are

Credit Financing, Inc., and Equity Lending Company are secured parties with security interests in property owned by Fleet Shipping Corporation. Priority between these security interests is generally determined by

Metro Motors files a financing statement giving notice to the public that it has a secured interest in collateral belonging to Nate's Limousine Service, which is the debtor named in the statement. A uniform financing statement used in all states is

Market Credit Corporation is the secured party in a secured transaction with Northwest Outfitters. Market Credit could also be referred to as

Bagels Café defaults on debts to Country Bank and Hillside Loan Company. Country Bank perfected its security interest before Hillside. The bank takes possession of the collateral in which it has a security interest. On a sale of the collateral, the proceeds will be applied first to

Most of the customers in any business are buyers in the ordinary course of business.

Fiona borrows $1,000 from Garden State Bank, using her recreational vehicle (RV) , which she purchased at Hugo's RV Sales & Service, as collateral. To perfect its security interest, the bank must file its financing statement with

Capital Projects, Inc., files a financing statement to provide notice of its security interest in the property of Data Network Corporation. The initial effective term of a financing statement is a period of

Jones lives in Illinois, but works in Indiana. Jones borrows $1,000 from Heartland Bank, using her car as collateral. To perfect its security interest, the bank must file its financing statement in at least