Question 1

Under revised Article 9,the UCC allows a security agreement to be created by the consumer online.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is true regarding a secured creditor's disposition of the collateral after the debtor's default?

Accepted Answer

A) The debtor cannot redeem the collateral after his default. 
B) The collateral must be disposed of by private sale. 
C) The creditor may opt not to repossess the collateral and instead sue the debtor on his underlying obligation. 
D) If the proceeds realized from the sale of the collateral exceed the various expenses that must be satisfied from those proceeds,the surplus goes to the creditor. 
A) The debtor cannot redeem the collateral after his default. 
B) The collateral must be disposed of by private sale. 
C) The creditor may opt not to repossess the collateral and instead sue the debtor on his underlying obligation. 
D) If the proceeds realized from the sale of the collateral exceed the various expenses that must be satisfied from those proceeds,the surplus goes to the creditor.

Question 3

If the debtor defaults on his agreement with the creditor,one of the creditor's options is to repossess the collateral and then sell it.

Accepted Answer

A) True 
 B)False

Question 4

Revised Article 9 of the UCC,which governs secured transactions,has been adopted in how many states?

Accepted Answer

A) 50 states 
B) 42 states 
C) 23 states 
D) 14 states 
A) 50 states 
B) 42 states 
C) 23 states 
D) 14 states

Question 5

The Total Household Appliance store sells a refrigerator to Alvin,on the condition of making payments in installments.In this case,to perfect its security interest,the store:

Accepted Answer

A) has to file its purchase money security interest. 
B) need not file its purchase money security interest. 
C) has to take possession of the refrigerator. 
D) need not attach the refrigerator. 
A) has to file its purchase money security interest. 
B) need not file its purchase money security interest. 
C) has to take possession of the refrigerator. 
D) need not attach the refrigerator.

Question 6

A security interest is said to be a property interest in the collateral.

Accepted Answer

A) True 
 B)False

Question 7

The perfection of a security interest by filing a financing statement:

Accepted Answer

A) serves to protect the secured party's interest in the collateral against most creditors who acquire a security interest in the same collateral after the filing. 
B) is necessary to enable the secured party to enforce its security interest against the debtor. 
C) serves to give the public actual notice. 
D) gives the secured party priority over all other parties who acquire an interest in the collateral after the filing. 
A) serves to protect the secured party's interest in the collateral against most creditors who acquire a security interest in the same collateral after the filing. 
B) is necessary to enable the secured party to enforce its security interest against the debtor. 
C) serves to give the public actual notice. 
D) gives the secured party priority over all other parties who acquire an interest in the collateral after the filing.

Question 8

What are the three options available to a secured creditor regarding the collateral if the debtor defaults?

Accepted Answer

If the debtor defaults,the secured credi

Question 9

The secured party whose interest in fixtures is perfected will have priority where the security interest is perfected prior to the time the goods become fixtures.

Accepted Answer

A) True 
 B)False

Question 10

If a creditor fails to comply with Article 9 and loses his preferred claim,he becomes a(n)________ if the debtor is declared bankrupt and may have little chance of recovering the money owed.

Accepted Answer

A) special creditor 
B) preferred creditor 
C) general creditor 
D) universal creditor 
A) special creditor 
B) preferred creditor 
C) general creditor 
D) universal creditor

Question 11

A secured creditor repossesses the collateral from the debtor and sells it to satisfy the debt.Which of the following is paid first?

Accepted Answer

A) Debt of the creditor 
B) Consequential damages suffered by the creditor due to the debtor's default 
C) Court costs 
D) Expenses of repossessing,storing,and selling the collateral 
A) Debt of the creditor 
B) Consequential damages suffered by the creditor due to the debtor's default 
C) Court costs 
D) Expenses of repossessing,storing,and selling the collateral

Question 12

For which of the following is the filing of a financing statement necessary for perfection to occur?

Accepted Answer

A) A security interest in documents of title 
B) A security interest in chattel paper 
C) A security interest in consumer goods 
D) A security interest in general intangibles 
A) A security interest in documents of title 
B) A security interest in chattel paper 
C) A security interest in consumer goods 
D) A security interest in general intangibles

Question 13

According to the Code classifications of collateral,investment property includes:

Accepted Answer

A) patents,copyrights,software,and franchises. 
B) checks,notes,drafts,and certificates of deposit. 
C) stocks,bonds,and commodity contracts. 
D) bills of lading,dock warrants,dock receipts,and warehouse receipts. 
A) patents,copyrights,software,and franchises. 
B) checks,notes,drafts,and certificates of deposit. 
C) stocks,bonds,and commodity contracts. 
D) bills of lading,dock warrants,dock receipts,and warehouse receipts.

Question 14

A ________ buys goods in the common course from a person who is in the business of selling goods of that kind.

Accepted Answer

A) bona fide purchaser 
B) good faith purchaser 
C) buyer in the ordinary course of business 
D) buyer on credit 
A) bona fide purchaser 
B) good faith purchaser 
C) buyer in the ordinary course of business 
D) buyer on credit

Question 15

In the case in the text,Palmatier v.Wells Fargo Financial National Bank,the court held that:

Accepted Answer

A) the sales order ticket proved that value was not given. 
B) the sales order ticket failed to describe the collateral. 
C) the sales order ticket failed to incorporate the terms of the credit card agreement. 
D) the sales order ticket created a perfected purchase money security interest in the furniture. 
A) the sales order ticket proved that value was not given. 
B) the sales order ticket failed to describe the collateral. 
C) the sales order ticket failed to incorporate the terms of the credit card agreement. 
D) the sales order ticket created a perfected purchase money security interest in the furniture.

Question 16

Why is filing a financing statement the only practical way to perfect a security interest in equipment?

Accepted Answer

Possession by the creditor is usually no

Question 17

Which section of the UCC defines what constitutes default in a secure transaction?

Accepted Answer

A) 2-205 
B) 3-104 
C) The UCC does not define default;it is defined in private agreements between the parties. 
D) 9-102 
A) 2-205 
B) 3-104 
C) The UCC does not define default;it is defined in private agreements between the parties. 
D) 9-102

Question 18

Which of the following is true about continuation statements?

Accepted Answer

A) A continuation statement must be filled after the lapse of the five-year period of the financing statement. 
B) The continuation statement must be signed by the secured party. 
C) The effectiveness of the financing statement has nothing to do with the continuation statement. 
D) Continuation statements may be filed just once. 
A) A continuation statement must be filled after the lapse of the five-year period of the financing statement. 
B) The continuation statement must be signed by the secured party. 
C) The effectiveness of the financing statement has nothing to do with the continuation statement. 
D) Continuation statements may be filed just once.

Question 19

Which of the following elements is an exception that validates a financing statement,which covers goods that are to become fixtures,without it being lapsed?

Accepted Answer

A) Name of the debtor 
B) Name of the secured party 
C) Description of a real estate mortgage 
D) Description of a nonfixture 
A) Name of the debtor 
B) Name of the secured party 
C) Description of a real estate mortgage 
D) Description of a nonfixture

Question 20

Perfection by public filing of a financing statement in the appropriate public office serves as ________ notice to the world.

Accepted Answer

A) express 
B) implied 
C) constructive 
D) public 
A) express 
B) implied 
C) constructive 
D) public

Exam 29: Security Interests in Personal Property

Under revised Article 9,the UCC allows a security agreement to be created by the consumer online.

Which of the following statements is true regarding a secured creditor's disposition of the collateral after the debtor's default?

If the debtor defaults on his agreement with the creditor,one of the creditor's options is to repossess the collateral and then sell it.

Revised Article 9 of the UCC,which governs secured transactions,has been adopted in how many states?

The Total Household Appliance store sells a refrigerator to Alvin,on the condition of making payments in installments.In this case,to perfect its security interest,the store:

A security interest is said to be a property interest in the collateral.

The perfection of a security interest by filing a financing statement:

What are the three options available to a secured creditor regarding the collateral if the debtor defaults?

The secured party whose interest in fixtures is perfected will have priority where the security interest is perfected prior to the time the goods become fixtures.

If a creditor fails to comply with Article 9 and loses his preferred claim,he becomes a(n)________ if the debtor is declared bankrupt and may have little chance of recovering the money owed.

A secured creditor repossesses the collateral from the debtor and sells it to satisfy the debt.Which of the following is paid first?

For which of the following is the filing of a financing statement necessary for perfection to occur?

According to the Code classifications of collateral,investment property includes:

A ________ buys goods in the common course from a person who is in the business of selling goods of that kind.

In the case in the text,Palmatier v.Wells Fargo Financial National Bank,the court held that:

Why is filing a financing statement the only practical way to perfect a security interest in equipment?

Which section of the UCC defines what constitutes default in a secure transaction?

Which of the following is true about continuation statements?

Which of the following elements is an exception that validates a financing statement,which covers goods that are to become fixtures,without it being lapsed?

Perfection by public filing of a financing statement in the appropriate public office serves as ________ notice to the world.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

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