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Exam 24: Security Interests in Personal Property

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Question 21

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Select Furniture Store sells household consumer goods.To create a purchase-money security interest,Select Furniture must

A) assign,to a collecting agent,a portion of its accounts payable.
B) assign,to a collecting agent,a portion of its accounts receivable.
C) extend credit for part or all of the purchase price of the goods.
D) refer purchasers to a third-party lender.

E) A) and B)
F) None of the above

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Question 22

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Rich Financial,Inc.,files a financing statement regarding a transaction with Supreme Business Company.To be valid,the financing statement must contain all of the following except

A) a description of the collateral.
B) a statement of the purpose for the transaction.
C) Rich's name.
D) Standard's name.

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

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Question 23

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Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto Sales. Fine sells the cars to consumers and businesses. -Refer to Fact Pattern 24-1.A car in Fine's possession is probably

The payment of Nero's debt to Olly is guaranteed by Nero's personal property.Nero is located in Pennsylvania.Olly communicates to the appropriate state official a security agreement that uses only Quality Engineering,the trade name of Nero's business.To perfect Olly's interest,this is

Middling Credit Corporation asks Little Supply Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property.This is

A buyer in the ordinary course of business has priority over any security interest created by the seller.

The concept of a floating lien does not apply to a shifting stock of goods.

On default,unless the security agreement states otherwise,the secured party has the right to repossess collateral.

The last security interest to be perfected is the first in priority over any other perfected security interests.

If collateral consists of consumer goods subject to a purchase-money security interest,the secured party must "purchase" the goods on default.

Proceeds consist of whatever is received when collateral is sold.

County Bank wants to perfect its security interest in collateral owned by Direct Sales Company.Most likely,a financing statement should be filed with

Sara needs $1,513 to buy textbooks and other school supplies.Tomas agrees to loan Sara $1,513,accepting as collateral Tomas'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

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

The payment of Jose's debt to Klint is guaranteed by Jose's personal property.The process by which Klint can protect himself against the claims of third parties to this property is

To qualify as a commercially reasonable sale,a secured party's sale of collateral,after default and repossession,must be public.

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

The state office in which a financing statement should be filed depends on the creditor's location.

The payment of Yves's debt to Zac is guaranteed by Yves's personal property.Their agreement describes Yves's subject property by serial number.To establish Zac's interest,this is

When a secured debt is paid,the secured party must file a termination statement regardless of the goods' classification.