Question 1

A security agreement must be filed in person to be valid and enforceable.

Accepted Answer

A) True 
 B)False

Question 2

A description of collateral as "all the debtor's assets" is too general to reasonably identify the subject of a security agreement.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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

Accepted Answer

A) True 
 B)False

Question 5

Dag is the secured party in a secured transaction with Elmo.In this transaction,Dag

Accepted Answer

A) has a security interest. 
B) owes payment. 
C) owes performance. 
D) owns collateral.

Question 6

Olaf is the creditor in a transaction with Phil.Once certain requirements are met,Olaf's rights will attach,which means that Olaf will have

Accepted Answer

A) an indivisible ownership right to Phil's property. 
B) an enforceable security interest in Phil's property. 
C) a notice affixed to Phil's property. 
D) the permission of a court to seize Phil's property.

Question 7

A secured party can release the collateral described in a filed financing statement only if the debtor has paid the debt.

Accepted Answer

A) True 
 B)False

Question 8

Refer to Fact Pattern 18-1.Ira,a police officer,buys an Excel from Fine to drive in his off-duty hours.Ira's Excel is

Accepted Answer

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

Question 9

City Bank's financing statement in collateral owned by Delta Waters Corporation will expire in less than a year.Filed timely,a continuation statement could extend the effectiveness of the financing statement for

Accepted Answer

A) one year. 
B) two years. 
C) five years. 
D) ten years.

Question 10

A security interest is enforceable only if the collateral is in the secured party's possession.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) a written agreement and Summit's possession of the SUV. 
B) a written agreement or Summit's possession of the SUV. 
C) the vehicle seller's acknowledgement of the loan in writing. 
D) Toby's possession of the SUV.

Exam 18: Security Interests in Personal Property

A security agreement must be filed in person to be valid and enforceable.

A description of collateral as "all the debtor's assets" is too general to reasonably identify the subject of a security agreement.

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

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

Dag is the secured party in a secured transaction with Elmo.In this transaction,Dag

Olaf is the creditor in a transaction with Phil.Once certain requirements are met,Olaf's rights will attach,which means that Olaf will have

A secured party can release the collateral described in a filed financing statement only if the debtor has paid the debt.

Refer to Fact Pattern 18-1.Ira,a police officer,buys an Excel from Fine to drive in his off-duty hours.Ira's Excel is

City Bank's financing statement in collateral owned by Delta Waters Corporation will expire in less than a year.Filed timely,a continuation statement could extend the effectiveness of the financing statement for

A security interest is enforceable only if the collateral is in the secured party's possession.

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

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