Question 1

Self-help repossession of collateral upon a buyer's default is contrary to public policy and never is allowed.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The steps in terminating a financing transaction upon full payment by the debtor include the preparation of a termination statement by the creditor and the presentation of the statement to the filing officer, who marks the record "terminated."

Accepted Answer

A) True 
 B)False  True

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

A buyer in the ordinary course of business who purchases inventory goods from a debtor who had placed a security interest on those goods in favor of a creditor:

Accepted Answer

A)   is not subject to the security interest.
B)   is not subject to the security interest unless it was perfected.
C)   is not subject to the security interest unless the buyer was aware of it.
D)   is subject to the security interest.

Question 6

When a seller sells on credit and is given a security interest in the goods, that interest is called:

Accepted Answer

A)   a purchase money security interest.
B)   a future transaction.
C)   a floating lien.
D)   none of the above.

Question 7

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 8

In most cases, value, which allows attachment of a security interest, is any consideration that supports a simple contract.

Accepted Answer

A) True 
 B)False

Question 9

Consumer goods are classified into different categories based on the debtor's intended use, not the physical characteristics of the goods.

Accepted Answer

A) True 
 B)False  True

Question 10

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 11

When a state statute requires a security interest in a motor vehicle to be noted on the certificate of title, the security interest is perfected:

Accepted Answer

A)   by the certificate notation, when a non-inventory motor vehicle is involved.
B)   by filing under the UCC, regardless of how the vehicle is classified.
C)   by filing under the UCC, when the motor vehicle is inventory.
D)   either by the certificate notation or by a UCC filing, depending on how the state statute defines the term motor vehicle.

Question 12

Compulsory resale of collateral is not recognized by the Uniform Commercial Code.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

A security interest will be perfected without filing when:

Accepted Answer

A)   the transaction involves any consumer goods.
B)   the transaction involves inventory goods.
C)   the transaction involves equipment.
D)   the transaction involves a purchase money security interest in consumer goods.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

A security interest gives a creditor more protection than is afforded by a right to sue on the debt.

Accepted Answer

A) True 
 B)False

Question 18

A financing statement need not be filed in a public place.

Accepted Answer

A) True 
 B)False

Question 19

Perfection can occur merely by possession of the collateral by the creditor.

Accepted Answer

A) True 
 B)False  True

Question 20

A debtor has sufficient rights in the collateral for a security interest to attach only if the debtor owns the collateral.

Accepted Answer

A) True 
 B)False

Exam 34: Secured Transactions in Personal Property

Self-help repossession of collateral upon a buyer's default is contrary to public policy and never is allowed.

Correct Answer
verified

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

Correct Answer
verified

The steps in terminating a financing transaction upon full payment by the debtor include the preparation of a termination statement by the creditor and the presentation of the statement to the filing officer, who marks the record "terminated."

Correct Answer
verified
True

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

Correct Answer
verified

A buyer in the ordinary course of business who purchases inventory goods from a debtor who had placed a security interest on those goods in favor of a creditor:

Correct Answer
verified

When a seller sells on credit and is given a security interest in the goods, that interest is called:

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

In most cases, value, which allows attachment of a security interest, is any consideration that supports a simple contract.

Correct Answer
verified

Consumer goods are classified into different categories based on the debtor's intended use, not the physical characteristics of the goods.

Correct Answer
verified
True

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

When a state statute requires a security interest in a motor vehicle to be noted on the certificate of title, the security interest is perfected:

Correct Answer
verified

Compulsory resale of collateral is not recognized by the Uniform Commercial Code.

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

Perfection of a security interest takes place:

Correct Answer
verified

A security interest will be perfected without filing when:

Correct Answer
verified

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

Correct Answer
verified

A security interest gives a creditor more protection than is afforded by a right to sue on the debt.

Correct Answer
verified

A financing statement need not be filed in a public place.

Correct Answer
verified

Perfection can occur merely by possession of the collateral by the creditor.

Correct Answer
verified
True

A debtor has sufficient rights in the collateral for a security interest to attach only if the debtor owns the collateral.

Correct Answer
verified

Exam 34: Secured Transactions in Personal Property

Self-help repossession of collateral upon a buyer's default is contrary to public policy and never is allowed.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The steps in terminating a financing transaction upon full payment by the debtor include the preparation of a termination statement by the creditor and the presentation of the statement to the filing officer, who marks the record "terminated."

Correct AnswerverifiedTrue

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

Correct AnswerverifiedShow Answer

A buyer in the ordinary course of business who purchases inventory goods from a debtor who had placed a security interest on those goods in favor of a creditor:

Correct AnswerverifiedShow Answer

When a seller sells on credit and is given a security interest in the goods, that interest is called:

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

In most cases, value, which allows attachment of a security interest, is any consideration that supports a simple contract.

Correct AnswerverifiedShow Answer

Consumer goods are classified into different categories based on the debtor's intended use, not the physical characteristics of the goods.

Correct AnswerverifiedTrue

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

When a state statute requires a security interest in a motor vehicle to be noted on the certificate of title, the security interest is perfected:

Correct AnswerverifiedShow Answer

Compulsory resale of collateral is not recognized by the Uniform Commercial Code.

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

Perfection of a security interest takes place:

Correct AnswerverifiedShow Answer

A security interest will be perfected without filing when:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A security interest gives a creditor more protection than is afforded by a right to sue on the debt.

Correct AnswerverifiedShow Answer

A financing statement need not be filed in a public place.

Correct AnswerverifiedShow Answer

Perfection can occur merely by possession of the collateral by the creditor.

Correct AnswerverifiedTrue

A debtor has sufficient rights in the collateral for a security interest to attach only if the debtor owns the collateral.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified