Question 1

A purchase-money security interest in consumer goods is created when a person buys goods on credit.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Lena borrows from Mac and Nicol,using the same collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is

Accepted Answer

A)  Lena.
B)  Mac and Nicol,in proportion to Lena's debt to each.
C)  Mac only.
D)  Nicol only.E) A) and B)
F) B) and D)

Question 4

Quotient Financial Corporation is a secured party with a security inter-est in property owned by Retail Sales Company. Perfection of this secu-rity in-ter-est may not protect Quotient Financial against the claim of

Accepted Answer

A)  a bank.
B)  a buyer in the ordinary course of business.
C)  a subsequent lien creditor.
D)  a trustee in bankruptcy.E) A) and B)
F) C) and D)

Question 5

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 6

Natural Resource Investment Company and Mega Bank are secured parties with security interests in property owned by LNG Gas Corpora-tion. Between these interests,the first to be filed or perfected has priority over other filed or perfected security interests in

Accepted Answer

A)  most circumstances.
B)  no circumstances.
C)  states that have not adopted Article 9 of the UCC.D) A) and B)
E) B) and C)

Question 7

Consumer Credit,Inc. (CCI) ,lends $1,000 to Joe. Kay acts as Joe's surety. If Kay pays the loan,she gets

Accepted Answer

A)  any right that CCI had against Joe,but not a right to be repaid by Joe.
B)  a right to be repaid by Joe,but not any right that CCI had against Joe.
C)  any right that CCI had against Joe and a right to be repaid by Joe.
D)  none of the choices.E) None of the above
F) All of the above

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Custom Cabinets & Carpentry Company has a claim against Duane's property to satisfy a debt that takes priority over other claims against the same property. This is

Accepted Answer

A)  a lien.
B)  a violation of most state laws.
C)  a composition agreement.
D)  a contract of suretyship.E) C) and D)
F) A) and B)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

A guaranty contract must normally be in writing to be enforceable.

Accepted Answer

A) True 
 B)False

Question 12

Gina borrows from Hilltop Bank the funds to buy a car. The car secures the debt. Gina defaults on the loan. Hilltop takes possession of the car,planning to sell it to recover some of the unpaid debt. Before Hilltop sells the car or enters into a contract for its sale,Gina can pay the bank what she owes and take back the car. This is

Accepted Answer

A)  a deficiency judgment.
B)  a floating lien.
C)  the right of redemption.
D)  the right of retention.E) A) and B)
F) B) and C)

Exam 25: Security Interests and Creditors Rights

Custom Cabinets & Carpentry Company has a claim against Duane's property to satisfy a debt that takes priority over other claims against the same property. This is

Correct Answer
verified

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

Correct Answer
verified

Quotient Financial Corporation is a secured party with a security inter-est in property owned by Retail Sales Company. Perfection of this secu-rity in-ter-est may not protect Quotient Financial against the claim of

Correct Answer
verified

Natural Resource Investment Company and Mega Bank are secured parties with security interests in property owned by LNG Gas Corpora-tion. Between these interests,the first to be filed or perfected has priority over other filed or perfected security interests in

Correct Answer
verified

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

Correct Answer
verified

Consumer Credit,Inc. (CCI) ,lends $1,000 to Joe. Kay acts as Joe's surety. If Kay pays the loan,she gets

Correct Answer
verified

Lena borrows from Mac and Nicol,using the same collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is

Correct Answer
verified

A guaranty contract must normally be in writing to be enforceable.

Correct Answer
verified

Correct Answer
verified

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

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

Correct Answer
verified

A purchase-money security interest in consumer goods is created when a person buys goods on credit.

Correct Answer
verified

Exam 25: Security Interests and Creditors Rights

Custom Cabinets & Carpentry Company has a claim against Duane's property to satisfy a debt that takes priority over other claims against the same property. This is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Quotient Financial Corporation is a secured party with a security inter-est in property owned by Retail Sales Company. Perfection of this secu-rity in-ter-est may not protect Quotient Financial against the claim of

Correct AnswerverifiedShow Answer

Natural Resource Investment Company and Mega Bank are secured parties with security interests in property owned by LNG Gas Corpora-tion. Between these interests,the first to be filed or perfected has priority over other filed or perfected security interests in

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Consumer Credit,Inc. (CCI) ,lends $1,000 to Joe. Kay acts as Joe's surety. If Kay pays the loan,she gets

Correct AnswerverifiedShow Answer

Lena borrows from Mac and Nicol,using the same collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is

Correct AnswerverifiedShow Answer

A guaranty contract must normally be in writing to be enforceable.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

A purchase-money security interest in consumer goods is created when a person buys goods on credit.

Correct AnswerverifiedShow Answer

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

Correct Answer
verified

Correct Answer
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