Question 1

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 three requirements for an enforceabl...

Question 2

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.E) B) and C)
F) A) and D)

Question 3

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.E) None of the above
F) B) and D)

Question 4

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 5

A financing statement must include the creditor's signature.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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

Accepted Answer

A) True 
 B)False

Question 8

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 9

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.E) All of the above
F) B) and C)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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.E) A) and D)
F) A) and B)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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.E) B) and C)
F) C) and D)

Question 14

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.E) A) and B)
F) C) and D)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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.E) B) and D)
F) A) and D)

Question 18

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.E) B) and C)
F) A) and D)

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 30: Secured Transactions

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
The three requirements for an enforceabl...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

A financing statement must include the creditor's signature.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 30: Secured Transactions

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​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe three requirements for an enforceabl...View AnswerShow Answer

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​

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

A financing statement must include the creditor's signature.

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

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

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The three requirements for an enforceabl...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified