Question 1

Upon the debtor's default, the creditor may sell the collateral at a public or private sale, or lease it to a third party.

Accepted Answer

A) True 
 B)False

Question 2

A(n)  __________ statement is a document, which may be requested by a paid-up debtor, stating that a security interest is no longer claimed under the specified financing statement.

Accepted Answer

A)  execution
B)  discharge
C)  termination
D)  hold harmless

Question 3

Which is not an element of attachment?

Accepted Answer

A)  the filing of a financing statement
B)  a security agreement
C)  value received by the debtor
D)  the debtor has rights in the collateral

Question 4

UCC Article 9 makes a statutory lien for repairs or storage subordinate to a perfected security interest in the same collateral.

Accepted Answer

A) True 
 B)False

Question 5

If the collateral is in the possession of the creditor:

Accepted Answer

A)  a financing statement must be filed to perfect the interest.
B)  the security interest is perfected.
C)  only a security interest has been obtained.
D)  the type of goods will determine the method of perfection.

Question 6

For a security interest to attach, the creditor must file a financing statement.

Accepted Answer

A) True 
 B)False

Question 7

Attachment provides creditors with rights.

Accepted Answer

A) True 
 B)False

Question 8

Consumer goods are not subject to perfection of a security interest.

Accepted Answer

A) True 
 B)False

Question 9

What is the purpose of a financing statement?

Accepted Answer

A)  to meet UCC accounting requirements under Article 9
B)  to create a security interest
C)  to amend a security agreement
D)  to alert third persons that a creditor has a security interest in the collateral described

Question 10

Upon a default by a buyer, the secured seller may resell the collateral:

Accepted Answer

A)  not less than three (3)  months after the buyer's default.
B)  not less than six (6)  months after the buyer's default.
C)  only at a public sale.
D)  at either a public or a private sale.

Question 11

King Electronics, a retailer of video equipment, sold two DVRs to Larson, a psychologist, for use in her professional practice, which was located in her home. The sale to Larson was made on credit. King retained a security interest in the DVRs sold but did not file a financing statement. Mills, another creditor of Larson, has asserted that his lien on the two DVRs is superior to King's security interest. Is he right? As you decide, remember to classify the DVRs as collateral in the hands of King and Larson.

Accepted Answer

Judgment will be for Mills. The DVRs are...

Question 12

When a security interest in property is inferior to other interests and claims to the property, it is said to be perfected.

Accepted Answer

A) True 
 B)False

Question 13

Perfection of a security interest takes place:

Accepted Answer

A)  upon the creditor's possession of the collateral.
B)  upon attachment in the case of a purchase money security interest in consumer goods.
C)  upon the filing of a financing statement.
D)  all of the above.

Question 14

Generally, a secured creditor who has repossessed collateral may retain the collateral and cancel the debt.

Accepted Answer

A) True 
 B)False

Question 15

A debtor may redeem collateral at any time prior to the time that the secured party has disposed of the collateral or entered into a binding contract for resale by tendering the entire obligation that is owed plus any legal costs and expenses incurred by the secured party.

Accepted Answer

A) True 
 B)False

Question 16

Wellfix Corporation manufactures electric toasters and sells them to retail appliance stores. Which of the following statements is true?

Accepted Answer

A)  The toasters are considered equipment in the hands of the appliance stores that purchase them.
B)  The toasters are considered inventory in the hands of Wellfix.
C)  The toasters are considered equipment in the hands of Wellfix.
D)  The toasters are considered consumer goods in the hands of Wellfix.

Question 17

A security interest that is effective against third persons as well as against the buyer is called a:

Accepted Answer

A)  universal security interest.
B)  prohibitive security interest.
C)  perfected security interest.
D)  protective security interest.

Question 18

A secured transaction covers proceeds from the collateral unless such interest is expressly excluded.

Accepted Answer

A) True 
 B)False

Question 19

Under Revised UCC Article 9, a debtor may authorize a financing statement by acquiring the collateral that is subject to the security agreement.

Accepted Answer

A) True 
 B)False

Question 20

Under Revised UCC Article 9, a financing statement must be signed by the debtor.

Accepted Answer

A) True 
 B)False

Exam 34: Secured Transactions in Personal Property

Which is not an element of attachment?

Correct Answer
verified

Generally, a secured creditor who has repossessed collateral may retain the collateral and cancel the debt.

Correct Answer
verified

Correct Answer
verified
Judgment will be for Mills. The DVRs are...
View Answer

If the collateral is in the possession of the creditor:

Correct Answer
verified

Upon the debtor's default, the creditor may sell the collateral at a public or private sale, or lease it to a third party.

Correct Answer
verified

Consumer goods are not subject to perfection of a security interest.

Correct Answer
verified

Attachment provides creditors with rights.

Correct Answer
verified

When a security interest in property is inferior to other interests and claims to the property, it is said to be perfected.

Correct Answer
verified

Upon a default by a buyer, the secured seller may resell the collateral:

Correct Answer
verified

A debtor may redeem collateral at any time prior to the time that the secured party has disposed of the collateral or entered into a binding contract for resale by tendering the entire obligation that is owed plus any legal costs and expenses incurred by the secured party.

Correct Answer
verified

A(n) __________ statement is a document, which may be requested by a paid-up debtor, stating that a security interest is no longer claimed under the specified financing statement.

Correct Answer
verified

What is the purpose of a financing statement?

Correct Answer
verified

A secured transaction covers proceeds from the collateral unless such interest is expressly excluded.

Correct Answer
verified

For a security interest to attach, the creditor must file a financing statement.

Correct Answer
verified

Under Revised UCC Article 9, a financing statement must be signed by the debtor.

Correct Answer
verified

A security interest that is effective against third persons as well as against the buyer is called a:

Correct Answer
verified

Perfection of a security interest takes place:

Correct Answer
verified

UCC Article 9 makes a statutory lien for repairs or storage subordinate to a perfected security interest in the same collateral.

Correct Answer
verified

Under Revised UCC Article 9, a debtor may authorize a financing statement by acquiring the collateral that is subject to the security agreement.

Correct Answer
verified

Wellfix Corporation manufactures electric toasters and sells them to retail appliance stores. Which of the following statements is true?

Correct Answer
verified

Exam 34: Secured Transactions in Personal Property

Which is not an element of attachment?

Correct AnswerverifiedShow Answer

Generally, a secured creditor who has repossessed collateral may retain the collateral and cancel the debt.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedJudgment will be for Mills. The DVRs are...View AnswerShow Answer

If the collateral is in the possession of the creditor:

Correct AnswerverifiedShow Answer

Upon the debtor's default, the creditor may sell the collateral at a public or private sale, or lease it to a third party.

Correct AnswerverifiedShow Answer

Consumer goods are not subject to perfection of a security interest.

Correct AnswerverifiedShow Answer

Attachment provides creditors with rights.

Correct AnswerverifiedShow Answer

When a security interest in property is inferior to other interests and claims to the property, it is said to be perfected.

Correct AnswerverifiedShow Answer

Upon a default by a buyer, the secured seller may resell the collateral:

Correct AnswerverifiedShow Answer

A debtor may redeem collateral at any time prior to the time that the secured party has disposed of the collateral or entered into a binding contract for resale by tendering the entire obligation that is owed plus any legal costs and expenses incurred by the secured party.

Correct AnswerverifiedShow Answer

A(n) __________ statement is a document, which may be requested by a paid-up debtor, stating that a security interest is no longer claimed under the specified financing statement.

Correct AnswerverifiedShow Answer

What is the purpose of a financing statement?

Correct AnswerverifiedShow Answer

A secured transaction covers proceeds from the collateral unless such interest is expressly excluded.

Correct AnswerverifiedShow Answer

For a security interest to attach, the creditor must file a financing statement.

Correct AnswerverifiedShow Answer

Under Revised UCC Article 9, a financing statement must be signed by the debtor.

Correct AnswerverifiedShow Answer

A security interest that is effective against third persons as well as against the buyer is called a:

Correct AnswerverifiedShow Answer

Perfection of a security interest takes place:

Correct AnswerverifiedShow Answer

UCC Article 9 makes a statutory lien for repairs or storage subordinate to a perfected security interest in the same collateral.

Correct AnswerverifiedShow Answer

Under Revised UCC Article 9, a debtor may authorize a financing statement by acquiring the collateral that is subject to the security agreement.

Correct AnswerverifiedShow Answer

Wellfix Corporation manufactures electric toasters and sells them to retail appliance stores. Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Judgment will be for Mills. The DVRs are...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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