Chap030
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Chap030

Course Number: BLAW 3201, Fall 2012

College/University: LSU

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Chapter 30 - Secured Transactions Chapter 30 Secured Transactions True / False Questions 1. Collateral is the property that is subject to a security interest. True False 2. To become a secured party, the creditor must perfect a security interest in the collateral of the debtor. True False 3. According to the UCC, value is consideration. True False 4. The person who fails to make payments is said to have...

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30 Chapter - Secured Transactions Chapter 30 Secured Transactions True / False Questions 1. Collateral is the property that is subject to a security interest. True False 2. To become a secured party, the creditor must perfect a security interest in the collateral of the debtor. True False 3. According to the UCC, value is consideration. True False 4. The person who fails to make payments is said to have defaulted on a loan. True False 5. When perfection by possession occurs, the parties must have a written security agreement. True False 6. Perfection of a security interest in a motor vehicle generally occurs when the secured party files the interest with the state's Department of Motor Vehicles. True False 7. A security interest may apply to personal property that is not yet in the debtor's possession. True False 30-1 Chapter 30 - Secured Transactions 8. Generally, unsecured parties have priority over secured creditors. True False 9. Under the UCC, a buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected. True False 10. If a buyer purchases chattel paper, in the ordinary course of business, the buyer can obtain the good free of any security interest without any other requirement. True False Multiple Choice Questions 11. A(n) ______ is a transaction in which the payment of a debt is guaranteed by personal property owned by the debtor. A. Approved transfer B. Approved guarantee C. Secured transaction D. Effected transaction E. Guaranteed debt 12. Which of the following articles of the UCC governs secured transactions and personal property? A. Article 1. B. Article 4. C. Article 5. D. Article 7. E. Article 9. 30-2 Chapter 30 - Secured Transactions 13. Which of the following is an interest in personal property or fixtures which secures payment or performance of an obligation? A. An approved interest. B. A secured interest. C. A secured transaction. D. A debt transaction. E. A security agreement. 14. Which of the following is the person or party that holds the interest in the secured property? A. A debtor. B. A transaction party. C. An approved party. D. A secured party. E. An attached party. 15. A ______ is a person or party that has an obligation to the secured party. A. creditor B. debtor C. secured creditor D. secured debtor E. transaction debtor 16. Which of the following is the agreement by which the debtor gives the secured interest to the secured party? A. Collateral agreement. B. Secured interest. C. Debtor agreement. D. Secured transaction. E. Security agreement. 30-3 Chapter 30 - Secured Transactions 17. Which of the following are examples of collateral? A. Goods. B. Indispensable paper. C. Intangibles. D. All of the above. E. Goods and indispensable paper, but not intangibles. 18. Which of the following are examples of goods? A. Consumer goods. B. Farm products. C. Documents of title. D. All of the above. E. Consumer goods and farm products, but not documents of title. 19. Which of the following is an example of indispensable paper? A. Fixtures. B. Documents of title. C. Accounts. D. All of the above. E. Fixtures and documents of title, but not accounts. 20. Which of the following is an example of an intangible? A. Accounts. B. Goodwill. C. Literary rights. D. All of the above. E. Accounts and goodwill, but not literary rights. 30-4 Chapter 30 - Secured Transactions 21. When ______ occurs, the creditor becomes the secured party who has a security interest in the collateral. A. Attachment B. Transformation C. Reaffirmation D. Security E. Perfection 22. Which of the following is formed when a debtor uses borrowed money from the secured party to buy the collateral? A. A secured possessory interest. B. A loaned money possessory interest. C. A purchase-money security interest. D. A purchase-cash consumer interest. E. A perfected security interest. 23. Which of the following is defined as the series of legal steps a secured party takes to protect its rights and collateral from other creditors who wish to have their debts returned through the same collateral? A. Perfection B. Filing C. Noticing D. Financing noticing E. Arrangement 24. According to the UCC, which of the following should a financing statement list? A. The names and addresses of all parties involved only. B. The names and addresses of all the parties involved and a description of the collateral only. C. The names and addresses of all the parties involved, a description of the collateral, and the signature of the debtor. D. The name of the financing bank and the name of the debtor, and a description of the collateral only. E. The name of the financing bank, the signature of the debtor, and a description of the collateral. 30-5 Chapter 30 - Secured Transactions 25. Once a financing statement has been filed with a correct agency, for how long is the statement valid under the UCC? A. 1 year B. 2 years C. 3 years D. 4 years E. 5 years 26. Transfer of collateral to a secured party is called a[n] ____. A. Allegiant B. Pledge C. Transfer D. Allonge E. Release 27. Which of the following types of collateral must be perfected through possession? A. Certificates of deposit. B. Stock. C. Bonds. D. All of the above. E. There are no types of collateral that must be perfected through possession. 28. Which of the following under the UCC is a good used or bought for use primarily for personal, family, or household purposes? A. A retail good. B. A consumer good. C. A pledged good. D. A financed good. E. An approved good. 30-6 Chapter 30 - Secured Transactions 29. Which of the following is true under the UCC regarding a security interest in collateral that has been perfected in one state when the collateral is moved to another state? A. A security interest in collateral that has been perfected in one state will generally expire immediately when the collateral is moved to another state. B. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the other state. C. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of six months from the date that the property is brought into the other state. D. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of two months from the date that the property is brought into the other state. E. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of 30 days from the date that the property is brought into the other state. 30. Generally, once a secured party perfects its interest in collateral, the perfection is effective until the collateral is ____. A. Sold B. Exchanged C. Transferred D. All of the above E. Sold or exchanged, but not transferred 31. Which of the following is the designation for property acquired by the debtor after a security agreement covering the property is made? A. Post-dated property. B. After-acquired property. C. Proceeds. D. Post-acquired property. E. Subsequently acquired property. 30-7 Chapter 30 - Secured Transactions 32. Which of the following can be considered after-acquired property? A. Inventory. B. Livestock. C. Equipment. D. All of the above. E. Inventory and equipment, but not livestock. 33. When a debtor sells collateral, he or she receives ____, something that is exchanged for collateral. A. After-acquired property B. Subsequent-acquired property C. Proceeds D. Collateral E. Post-financed funds 34. Which of the following is true regarding a secured party's interest in proceeds? A. A secured party automatically has an interest in proceeds. B. A secured party has an interest in proceeds only if the proceeds are taken into the possession of the secured party. C. A secured party has an interest in proceeds only if a financing statement is filed on the proceeds. D. A secured party has an interest in proceeds if the secured party takes the proceeds into the possession of the secured party or if the secured party files a financing statement on the proceeds. E. The secured party may not under any circumstances acquire a security interest in proceeds. 35. Under the UCC, a secured party's interest in proceeds lasts for ______ after the debtor receives the proceeds. A. 30 Days B. 60 Days C. 1 Year D. 5 Days E. 10 Days 30-8 Chapter 30 - Secured Transactions 36. Which of the following is an amendment to a financing statement that states that the debtor has no obligation to the secured party? A. An ending statement. B. A termination statement. C. A bind-up statement. D. A release statement. E. A reversion statement. 37. Assuming a purchase-money security interest does not exist, which of the following is true when there is a dispute between creditors involving the ownership of collateral? A. If there is a dispute between a perfected secured party and an unperfected secured party, the creditor with the perfected interest has priority over the unperfected interest. B. The party with a secured interest will have priority in repossessing collateral over a party with an unsecured interest. C. The party that attached its interest first will have priority over the party that perfected its interest first. D. All of the above. E. In a dispute between a perfected secured party and an unperfected secured party, the creditor with the perfected interest has priority over the unperfected interest; a party with a secured interest will have priority over a party with an unsecured interest; but, a party that attaches first does not have priority over a party that perfects first. 38. Assuming a purchase-money security interest is not involved, which of the following is true regarding priority when there are two secured parties and neither has perfected? A. The party who attached its interest first will prevail. B. The party who attached its interest second will prevail. C. The parties will divide the proceeds evenly between them. D. The party who loaned the most money on the collateral has priority. E. The party who loaned the least amount on the collateral has priority. 30-9 Chapter 30 - Secured Transactions 39. Which of the following was the result at the state Supreme Court level in the Case Opener, the case in which after surrendering their vehicle after nonpayment, the plaintiffs were sued by the defendant for more than the original sales price of the car based on expenses of reselling the vehicle? A. It was determined that the sale was commercially unreasonable. B. It was determined that the sale was not commercially reasonable. C. It was determined that the defendant would prevail if the sale was commercially reasonable. D. It was determined that the defendant would prevail if the sale was commercially unreasonable. E. It was determined that the plaintiffs had engaged in fraud by returning the vehicle with excessive mileage and that the defendant was entitled to prevail. 40. Which of the following is true regarding priority involving a purchase-money security interest that is not in inventory? A. The purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 20 days of the debtor's possession of the collateral. B. The purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 30 days of the debtor's possession of the collateral. C. The purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 40 days of the debtor's possession of the collateral. D. The purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 45 days of the debtor's possession of the collateral. E. If the purchase-money security interest is not inventoried collateral, the purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 60 days of the debtor's possession of the collateral. 30-10 Chapter 30 - Secured Transactions 41. Which of the following is a term used to identify a person who routinely buys goods in good faith from a person who routinely sells these goods? A. A buyer in the typical course of business. B. An approved buyer. C. An approved buyer in the ordinary course of business. D. A buyer in the ordinary course of business. E. An exchanger in the typical course of business. 42. Which of the following is true if a buyer of a consumer good subject to purchase-money security interest later sells the good? A. The security interest immediately terminates. B. The security interest passes to the new buyer. C. Regardless of whether the buyer is aware of the security interest, the security interest terminates if the sale to the new buyer is made before the original secured party files a financial statement. D. As long as the buyer is not aware of the security interest, purchases the good for his or her personal use, and purchases the good before the secured party files a financial statement, the new buyer obtains the good free of the security interest. E. Under the UCC, as long as the buyer is not aware of the security interest, purchases the good for resale, and purchases good before the secured party files a financial statement, the buyer obtains the good free of the security interest. 43. Which of the following is a writing that indicates both a monetary obligation and a security interest in specific goods? A. Chattel paper. B. Combined paper. C. Transactional paper. D. Monetary and secured paper. E. Specific interest paper. 44. Which of the following is a writing that demonstrates a right to payment of money? A. Chattel paper. B. Goods paper. C. Payment paper. D. An instrument. E. An authorization. 30-11 Chapter 30 - Secured Transactions 45. Which of the following may a buyer purchase in the ordinary course of business and obtain free of any security interest so long as the buyer is unaware of any previously existing security interest? A. Chattel paper. B. An instrument. C. An authorization. D. All of the above. E. Chattel paper or an instrument, but not an authorization. 46. Which of the following is true regarding the UCC's definition of default? A. The UCC defines default as failure to make any payment when due. B. The UCC defines default as failure to make a payment within 30 days after a payment is due. C. The UCC defines default as failure to make a payment within 60 days after a payment is due. D. The UCC defines default as failure to make a payment within 90 days after a payment is due. E. None of the above because the UCC does not define default. 47. Which of the following is true regarding the manner in which a secured party may sell collateral? A. The sale must be in a private sale. B. The sale must be in a public sale C. The sale must be in an acknowledged sale. D. The sale may be in a private sale, public sale, or an acknowledged sale. E. The sale may be in either a private sale or a public sale. 48. How long does a debtor have in which to object to a secured party's retention of collateral to satisfy a debt? A. 5 Days. B. 10 Days. C. 20 Days. D. 30 Days. E. 60 Days. 30-12 Chapter 30 - Secured Transactions 49. Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the proper designation under the UCC for the television? A. It is a consumer good. B. It is a pledge. C. It is an allonge. D. It is unsecured property. E. It is both unsecured and unperfected property. 50. Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the correct term for designating the effect of the failure of Dennis to continue making payments? A. He refused the loan. B. He defaulted on the loan. C. He unsecured the loan. D. He deaffirmed the loan. E. He discharged the loan. 51. Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the term for the type of agreement Dennis had with ABC Electronics? A. A pledged money interest. B. A collateralized interest. C. A purchase-money security interest. D. A security perfection interest. E. A cash deferred security interest. 30-13 Chapter 30 - Secured Transactions 52. Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is correct regarding the statement of Dennis that the security interest was not perfected? A. Dennis is wrong because the security interest perfected immediately. B. Dennis is correct because the security interest perfected when he was still in possession of the collateral 30 days after the purchase. C. Dennis is correct because the security interest perfected when he was still in possession of the collateral 60 days after the purchase. D. Dennis is correct because in the case of luxury goods, a financing statement must be filed within 10 days. E. Dennis is correct because in the case of luxury goods, a financing statement must be filed within 20 days. 53. Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the correct designation for the television in the agreement between Dennis and the electronic store? A. Pledged goods. B. Acknowledged goods. C. Collateral. D. Defined security. E. Illegal security. 30-14 Chapter 30 - Secured Transactions 54. Reference: "Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car as the collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics to use in her business. XYZ obtained a purchase money security interest on the computer and filed a financing statement. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. After the security interest with the bank was agreed upon, which of the following is the proper designation for any equipment that Molly obtains that would be subject to the bank's security interest? A. After-acquired property. B. Post-dated property. C. Cover property. D. Post-security property. E. There is no title for such property because such property may not validly be the subject of the security interest. 30-15 Chapter 30 - Secured Transactions 55. Reference: "Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car as the collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics to use in her business. XYZ obtained a purchase money security interest on the computer and filed a financing statement. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. Which of the following is true regarding priority to the computer? A. The bank had priority because the computer was considered after-acquired property properly covered by the initial security interest. B. XYZ Electronics had priority because XYZ Electronics has a purchase-money security interest in the computer. C. XYZ Electronics had priority only if XYZ Electronics perfected its security interest within 10 days of the purchase. D. XYZ Electronics had priority only if XYZ Electronics perfected its security interest within 20 days of the purchase. E. The bank had a security interest in the computer because it perfected its security interest before XYZ Electronics did so. 56. Reference: "Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car as the collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics to use in her business. XYZ obtained a purchase money security interest on the computer and filed a financing statement. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. What should the bank have done to terminate its interest in any property of Molly? A. The bank should have filed a termination statement. B. The bank should have filed an ending statement. C. The bank should have filed a waiver statement. D. The bank should have filed a release statement. E. The bank should have filed a stopgap statement. 30-16 Chapter 30 - Secured Transactions 57. Reference: "Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car as the collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics to use in her business. XYZ obtained a purchase money security interest on the computer and filed a financing statement. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. Which of the following is true regarding any compensation that Molly is entitled to from the bank because the bank did not timely file notice that it had no interest in her goods? A. She may recover $100 from the bank. B. She may recover $200 from the bank. C. She may recover $500 from the bank. D. She may recover $1,000 from the bank. E. She may recover $5,000 from the bank. 58. Reference: "Repossession." Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina was under the belief that her only option was to take possession of the collateral. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway one evening at midnight and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's belief that her only option was to take possession of the collateral? A. Tina was correct regardless of whether a vehicle or another type of good was involved. B. Tina was correct, but only because a vehicle was involved. C. Tina was incorrect, because only when a vehicle is involved, a party must disregard the collateral and proceed to judgment. D. Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina only had the right to ignore the collateral and proceed to judgment. E. Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina had the right to either take possession of the collateral or ignore rights in the collateral and proceed to judgment. 30-17 Chapter 30 - Secured Transactions 59. Reference: "Repossession." Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina was under the belief that her only option was to take possession of the collateral. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway one evening at midnight and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's repossession of the pick-up truck? A. She breached the peace in recovering the collateral. B. Tina did not breach the peace in recovering the collateral unless Joan can establish the existence of actual injuries. C. Tina did not breach the peace because she was entitled to repossess the vehicle and any injury sustained by Joan was her own fault. D. Tina breached the peace, but only because she did not provide Joan with prior notification that she was coming to repossess the collateral. E. Tina breached the peace, but only because she acted to repossess the collateral after 10:00 p.m. at night. 60. Reference: "Repossession." Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina was under the belief that her only option was to take possession of the collateral. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway one evening at midnight and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's taking possession of Barry's convertible? A. Tina breached the peace because she did not provide Barry prior notification that she was going to repossess the vehicle. B. Tina breached the peace because she took the vehicle from a public lot. C. Tina breached the peace unless she can establish that Barry gave her prior permission to repossess the vehicle in a public lot. D. Tina did not breach the peace because she acted in a reasonable manner in taking the collateral. E. Tina did not breach the peace because Barry sustained no documented physical injury. 30-18 Chapter 30 - Secured Transactions Essay Questions 61. Set forth the steps that a creditor must take to become a secured party. 62. What does the UCC provide regarding protection in movable collateral that is moved from one state to another? 63. List three advantages associated with perfection by possession. 30-19 Chapter 30 - Secured Transactions 64. Everett buys a new bicycle on credit from Bicycle City. Bicycle City has a security agreement for a purchase-money security interest in the bicycle. Everett, however, discovers that he does not have enough money to pay his rent. Therefore, he sells his bicycle to his neighbor, Helen, who is unaware of Bicycle City's security interest in the bicycle. Everett fails to make payments on the bicycle and Bicycle City seeks to repossess it. Discuss the rights and obligations of the parties. 65. What rights, if any, does a creditor who does not wish to repossess collateral have in the event of a default and why might a creditor prefer a remedy other than repossession of collateral? 30-20 Chapter 30 - Secured Transactions Chapter 30 Secured Transactions Answer Key True / False Questions 1. (p. 662) Collateral is the property that is subject to a security interest. TRUE Collateral is the property that is subject to the security interest. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 2. (p. 662) To become a secured party, the creditor must perfect a security interest in the collateral of the debtor. FALSE To become a secured party, the creditor must gain a security interest in the collateral of the debtor. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-02 How are secured interests created? Topic: Creation of Secured Interests 3. (p. 663) According to the UCC, value is consideration. TRUE According to the UCC, value is consideration. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-02 How are secured interests created? Topic: Creation of Secured Interests 30-21 Chapter 30 - Secured Transactions 4. (p. 663) The person who fails to make payments is said to have defaulted on a loan. TRUE You are supposed to make monthly payments to the bank, but you lose your job and cannot make the payments. When you fail to make these payments, you default on the loan. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 5. (p. 665) When perfection by possession occurs, the parties must have a written security agreement. FALSE There are several advantages associated with perfection by possession. First, a secured party does not have to file a financing statement. In fact, the parties do not have to even create a written security agreement. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 6. (p. 668) Perfection of a security interest in a motor vehicle generally occurs when the secured party files the interest with the state's Department of Motor Vehicles. FALSE Almost every state requires a certificate of title for any motor vehicle. Perfection of a security interest in a motor vehicle occurs when the secured party makes a notation of this interest on the certificate of title. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 30-22 Chapter 30 - Secured Transactions 7. (p. 668) A security interest may apply to personal property that is not yet in the debtor's possession. TRUE A security interest can also apply to personal property that is not yet in the debtor's possession. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-03 How are secured interests perfected? Topic: The Scope of a Security Interest 8. (p. 669) Generally, unsecured parties have priority over secured creditors. FALSE Generally, secured parties have priority over unsecured creditors. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 9. (p. 670) Under the UCC, a buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected. FALSE A buyer in the ordinary course of business can take the goods free of any security interest created by the seller of the good even if the security interest is perfected [9-320(a)]. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 30-23 Chapter 30 - Secured Transactions 10. (p. 672) If a buyer purchases chattel paper, in the ordinary course of business, the buyer can obtain the good free of any security interest without any other requirement. FALSE If a buyer purchases chattel paper, a writing that indicates both a monetary obligation and a security interest in specific goods, in the ordinary course of business, the buyer can obtain the good free of any security interest. The buyer must typically be unaware of the security interest in the good. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes Multiple Choice Questions 11. (p. 661) A(n) ______ is a transaction in which the payment of a debt is guaranteed by personal property owned by the debtor. A. Approved transfer B. Approved guarantee C. Secured transaction D. Effected transaction E. Guaranteed debt A secured transaction is a transaction in which the payment of a debt is guaranteed by personal property owned by the debtor. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Secured Transactions 30-24 Chapter 30 - Secured Transactions 12. (p. 661) Which of the following articles of the UCC governs secured transactions and personal property? A. Article 1. B. Article 4. C. Article 5. D. Article 7. E. Article 9. Article 9 of the Uniform Commercial Code (UCC) governs secured transactions in personal property (as opposed to real property). AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Secured Transactions 13. (p. 661) Which of the following is an interest in personal property or fixtures which secures payment or performance of an obligation? A. An approved interest. B. A secured interest. C. A secured transaction. D. A debt transaction. E. A security agreement. A secured interest is an "interest in personal property or fixtures which secures payment or performance of an obligation" [1-201(37)]. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 30-25 Chapter 30 - Secured Transactions 14. (p. 662) Which of the following is the person or party that holds the interest in the secured property? A. A debtor. B. A transaction party. C. An approved party. D. A secured party. E. An attached party. A secured party is the person or party that holds the interest in the secured property. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 15. (p. 662) A ______ is a person or party that has an obligation to the secured party. A. creditor B. debtor C. secured creditor D. secured debtor E. transaction debtor A debtor is the person or party that has an obligation to the secured party. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 30-26 Chapter 30 - Secured Transactions 16. (p. 662) Which of the following is the agreement by which the debtor gives the secured interest to the secured party? A. Collateral agreement. B. Secured interest. C. Debtor agreement. D. Secured transaction. E. Security agreement. A security agreement is the agreement in which the debtor gives the secured interest to the secured party. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 17. (p. 662) Which of the following are examples of collateral? A. Goods. B. Indispensable paper. C. Intangibles. D. All of the above. E. Goods and indispensable paper, but not intangibles. Collateral may include goods, indispensable paper, intangibles, and proceeds. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 30-27 Chapter 30 - Secured Transactions 18. (p. 662) Which of the following are examples of goods? A. Consumer goods. B. Farm products. C. Documents of title. D. All of the above. E. Consumer goods and farm products, but not documents of title. Goods include consumer goods, farm products, inventory, and equipment. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 19. (p. 662) Which of the following is an example of indispensable paper? A. Fixtures. B. Documents of title. C. Accounts. D. All of the above. E. Fixtures and documents of title, but not accounts. Indispensable paper includes documents of title, negotiable instruments, and chattel paper. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 30-28 Chapter 30 - Secured Transactions 20. (p. 662) Which of the following is an example of an intangible? A. Accounts. B. Goodwill. C. Literary rights. D. All of the above. E. Accounts and goodwill, but not literary rights. Intangibles include accounts, goodwill, and literary rights and proceeds. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 21. (p. 662) When ______ occurs, the creditor becomes the secured party who has a security interest in the collateral. A. Attachment B. Transformation C. Reaffirmation D. Security E. Perfection When attachment occurs, the creditor becomes a secured party with an interest in the collateral. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-02 How are secured interests created? Topic: Creation of Secured Interests 30-29 Chapter 30 - Secured Transactions 22. (p. 663) Which of the following is formed when a debtor uses borrowed money from the secured party to buy the collateral? A. A secured possessory interest. B. A loaned money possessory interest. C. A purchase-money security interest. D. A purchase-cash consumer interest. E. A perfected security interest. A purchase-money security interest (PMSI), is formed when a debtor uses borrowed money from the secured party to buy the collateral. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-02 How are secured interests created? Topic: Creation of Secured Interests 23. (p. 664) Which of the following is defined as the series of legal steps a secured party takes to protect its rights and collateral from other creditors who wish to have their debts returned through the same collateral? A. Perfection B. Filing C. Noticing D. Financing noticing E. Arrangement Perfection is a series of legal steps a secured party takes to protect its right in the other collateral from creditors who wish to have their debts satisfied through the same collateral. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 30-30 Chapter 30 - Secured Transactions 24. (p. 664) According to the UCC, which of the following should a financing statement list? A. The names and addresses of all parties involved only. B. The names and addresses of all the parties involved and a description of the collateral only. C. The names and addresses of all the parties involved, a description of the collateral, and the signature of the debtor. D. The name of the financing bank and the name of the debtor, and a description of the collateral only. E. The name of the financing bank, the signature of the debtor, and a description of the collateral. According to the UCC, a financing statement should list the names and addresses of all the parties involved, a description of the collateral, and the signature of the debtor (9-502). AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 25. (p. 665) Once a financing statement has been filed with a correct agency, for how long is the statement valid under the UCC? A. 1 year B. 2 years C. 3 years D. 4 years E. 5 years Under the UCC, the statement is valid for five years (9-515). AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 30-31 Chapter 30 - Secured Transactions 26. (p. 665) Transfer of collateral to a secured party is called a[n] ____. A. Allegiant B. Pledge C. Transfer D. Allonge E. Release The transfer of collateral to the secured party for the purpose of perfection is called a pledge. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 27. (p. 665) Which of the following types of collateral must be perfected through possession? A. Certificates of deposit. B. Stock. C. Bonds. D. All of the above. E. There are no types of collateral that must be perfected through possession. Certain types of collateral must be perfected through possession. These types of collateral include instruments writings that serve as evidence of rights to payment of money, such as certificates of depositand stocks and bonds. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 30-32 Chapter 30 - Secured Transactions 28. (p. 665-666) Which of the following under the UCC is a good used or bought for use primarily for personal, family, or household purposes? A. A retail good. B. A consumer good. C. A pledged good. D. A financed good. E. An approved good. Under the UCC, a consumer good is a good used or bought for use primarily for personal, family, or household purposes [9-102(23)]. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 30-33 Chapter 30 - Secured Transactions 29. (p. 667) Which of the following is true under the UCC regarding a security interest in collateral that has been perfected in one state when the collateral is moved to another state? A. A security interest in collateral that has been perfected in one state will generally expire immediately when the collateral is moved to another state. B. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the other state. C. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of six months from the date that the property is brought into the other state. D. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of two months from the date that the property is brought into the other state. E. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of 30 days from the date that the property is brought into the other state. According to the UCC, a security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the state. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 30. (p. 668) Generally, once a secured party perfects its interest in collateral, the perfection is effective until the collateral is ____. A. Sold B. Exchanged C. Transferred D. All of the above E. Sold or exchanged, but not transferred Generally, once a secured party perfects its interest in collateral, the perfection is effective until the collateral is sold, exchanged, or transferred. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-04 What is the scope of a security interest? Topic: The Scope of a Security Interest 30-34 Chapter 30 - Secured Transactions 31. (p. 668) Which of the following is the designation for property acquired by the debtor after a security agreement covering the property is made? A. Post-dated property. B. After-acquired property. C. Proceeds. D. Post-acquired property. E. Subsequently acquired property. After-acquired property is property acquired by the debtor after the security agreement is made. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-04 What is the scope of a security interest? Topic: The Scope of a Security Interest 32. (p. 668) Which of the following can be considered after-acquired property? A. Inventory. B. Livestock. C. Equipment. D. All of the above. E. Inventory and equipment, but not livestock. After-acquired property can be inventory, livestock, equipment, or almost any other kind of property. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-04 What is the scope of a security interest? Topic: The Scope of a Security Interest 30-35 Chapter 30 - Secured Transactions 33. (p. 668) When a debtor sells collateral, he or she receives ____, something that is exchanged for collateral. A. After-acquired property B. Subsequent-acquired property C. Proceeds D. Collateral E. Post-financed funds When a debtor sells collateral, he or she receives proceeds, something that is exchanged for collateral. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-04 What is the scope of a security interest? Topic: The Scope of a Security Interest 34. (p. 668) Which of the following is true regarding a secured party's interest in proceeds? A. A secured party automatically has an interest in proceeds. B. A secured party has an interest in proceeds only if the proceeds are taken into the possession of the secured party. C. A secured party has an interest in proceeds only if a financing statement is filed on the proceeds. D. A secured party has an interest in proceeds if the secured party takes the proceeds into the possession of the secured party or if the secured party files a financing statement on the proceeds. E. The secured party may not under any circumstances acquire a security interest in proceeds. The secured party automatically has an interest in the proceeds. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-04 What is the scope of a security interest? Topic: The Scope of a Security Interest 30-36 Chapter 30 - Secured Transactions 35. (p. 668) Under the UCC, a secured party's interest in proceeds lasts for ______ after the debtor receives the proceeds. A. 30 Days B. 60 Days C. 1 Year D. 5 Days E. 10 Days Under the UCC, the secured party's interest in the proceeds lasts only 10 days after the debtor receives the proceeds. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-04 What is the scope of a security interest? Topic: The Scope of a Security Interest 36. (p. 668) Which of the following is an amendment to a financing statement that states that the debtor has no obligation to the secured party? A. An ending statement. B. A termination statement. C. A bind-up statement. D. A release statement. E. A reversion statement. A termination statement is an amendment to a financing statement that provides that the debtor has no obligation to the secured party [9-513(a)]. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-04 What is the scope of a security interest? Topic: The Scope of a Security Interest 30-37 Chapter 30 - Secured Transactions 37. (p. 669) Assuming a purchase-money security interest does not exist, which of the following is true when there is a dispute between creditors involving the ownership of collateral? A. If there is a dispute between a perfected secured party and an unperfected secured party, the creditor with the perfected interest has priority over the unperfected interest. B. The party with a secured interest will have priority in repossessing collateral over a party with an unsecured interest. C. The party that attached its interest first will have priority over the party that perfected its interest first. D. All of the above. E. In a dispute between a perfected secured party and an unperfected secured party, the creditor with the perfected interest has priority over the unperfected interest; a party with a secured interest will have priority over a party with an unsecured interest; but, a party that attaches first does not have priority over a party that perfects first. Generally, secured parties have priority over unsecured creditors. This priority to the collateral does not depend on the perfection of a secured interest. Rather, the priority depends on the attachment of the secured interest. If there is a dispute between a perfected secured party and an unperfected secured party, the creditor with the perfected interest has priority over the unperfected interest. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 38. (p. 669) Assuming a purchase-money security interest is not involved, which of the following is true regarding priority when there are two secured parties and neither has perfected? A. The party who attached its interest first will prevail. B. The party who attached its interest second will prevail. C. The parties will divide the proceeds evenly between them. D. The party who loaned the most money on the collateral has priority. E. The party who loaned the least amount on the collateral has priority. If neither party has perfected its security interest, the party that attached its security interest first will have first claim to the collateral. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 30-38 Chapter 30 - Secured Transactions 39. (p. 676) Which of the following was the result at the state Supreme Court level in the Case Opener, the case in which after surrendering their vehicle after nonpayment, the plaintiffs were sued by the defendant for more than the original sales price of the car based on expenses of reselling the vehicle? A. It was determined that the sale was commercially unreasonable. B. It was determined that the sale was not commercially reasonable. C. It was determined that the defendant would prevail if the sale was commercially reasonable. D. It was determined that the defendant would prevail if the sale was commercially unreasonable. E. It was determined that the plaintiffs had engaged in fraud by returning the vehicle with excessive mileage and that the defendant was entitled to prevail. The Montana Supreme Court ruled that the sale was not commercially reasonable. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Secured Transactions 30-39 Chapter 30 - Secured Transactions 40. (p. 670) Which of the following is true regarding priority involving a purchase-money security interest that is not in inventory? A. The purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 20 days of the debtor's possession of the collateral. B. The purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 30 days of the debtor's possession of the collateral. C. The purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 40 days of the debtor's possession of the collateral. D. The purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 45 days of the debtor's possession of the collateral. E. If the purchase-money security interest is not inventoried collateral, the purchase-money security interest has priority over any other secured perfected interests as long as the purchase-money security interest is perfected within 60 days of the debtor's possession of the collateral. If the PMSI is in noninventory collateral, the PMSI has priority over any other secured perfected interests as long as the PMSI is perfected within 20 days of the debtor's possession of the collateral [9-324(a)]. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 30-40 Chapter 30 - Secured Transactions 41. (p. 670) Which of the following is a term used to identify a person who routinely buys goods in good faith from a person who routinely sells these goods? A. A buyer in the typical course of business. B. An approved buyer. C. An approved buyer in the ordinary course of business. D. A buyer in the ordinary course of business. E. An exchanger in the typical course of business. A buyer in the ordinary course of business is a person who routinely buys goods in good faith from a person who routinely sells these goods. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 42. (p. 671) Which of the following is true if a buyer of a consumer good subject to purchasemoney security interest later sells the good? A. The security interest immediately terminates. B. The security interest passes to the new buyer. C. Regardless of whether the buyer is aware of the security interest, the security interest terminates if the sale to the new buyer is made before the original secured party files a financial statement. D. As long as the buyer is not aware of the security interest, purchases the good for his or her personal use, and purchases the good before the secured party files a financial statement, the new buyer obtains the good free of the security interest. E. Under the UCC, as long as the buyer is not aware of the security interest, purchases the good for resale, and purchases good before the secured party files a financial statement, the buyer obtains the good free of the security interest. Under the UCC, as long as the buyer is not aware of the security interest, purchases the good for his or her personal use, and purchases the good before the secured party files a financial statement, the buyer obtains the good free of the security interest [9-320(b)]. Even though the secured party's interest perfects automatically, the secured party must have filed a financial statement to repossess a consumer good from another buyer. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 30-41 Chapter 30 - Secured Transactions 43. (p. 672) Which of the following is a writing that indicates both a monetary obligation and a security interest in specific goods? A. Chattel paper. B. Combined paper. C. Transactional paper. D. Monetary and secured paper. E. Specific interest paper. Chattel paper is a writing that indicates both a monetary obligation and a security interest in specific goods. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 44. (p. 672) Which of the following is a writing that demonstrates a right to payment of money? A. Chattel paper. B. Goods paper. C. Payment paper. D. An instrument. E. An authorization. An instrument is a writing that demonstrates a right to payment of money. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 30-42 Chapter 30 - Secured Transactions 45. (p. 672) Which of the following may a buyer purchase in the ordinary course of business and obtain free of any security interest so long as the buyer is unaware of any previously existing security interest? A. Chattel paper. B. An instrument. C. An authorization. D. All of the above. E. Chattel paper or an instrument, but not an authorization. If a buyer purchases chattel paper, a writing that indicates both a monetary obligation and a security interest in specific goods, or an instrument, a writing that demonstrates a right to payment of money, in the ordinary course of business, the buyer can obtain the good free of any security interest. The buyer must typically be unaware of the security interest in the good. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 46. (p. 672) Which of the following is true regarding the UCC's definition of default? A. The UCC defines default as failure to make any payment when due. B. The UCC defines default as failure to make a payment within 30 days after a payment is due. C. The UCC defines default as failure to make a payment within 60 days after a payment is due. D. The UCC defines default as failure to make a payment within 90 days after a payment is due. E. None of the above because the UCC does not define default. The UCC does not define default. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-06 What is default? Topic: Default 30-43 Chapter 30 - Secured Transactions 47. (p. 675) Which of the following is true regarding the manner in which a secured party may sell collateral? A. The sale must be in a private sale. B. The sale must be in a public sale C. The sale must be in an acknowledged sale. D. The sale may be in a private sale, public sale, or an acknowledged sale. E. The sale may be in either a private sale or a public sale. The secured party may sell the collateral in a private or public sale. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-06 What is default? Topic: Default 48. (p. 675) How long does a debtor have in which to object to a secured party's retention of collateral to satisfy a debt? A. 5 Days. B. 10 Days. C. 20 Days. D. 30 Days. E. 60 Days. The debtor has 20 days to object to the secured party's retention of the collateral. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-06 What is default? Topic: Default 30-44 Chapter 30 - Secured Transactions 49. (p. 665-666) Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the proper designation under the UCC for the television? A. It is a consumer good. B. It is a pledge. C. It is an allonge. D. It is unsecured property. E. It is both unsecured and unperfected property. A consumer good is a good used or bought for use primarily for personal, family, or household purposes [9-102(23)]. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 50. (p. 672) Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the correct term for designating the effect of the failure of Dennis to continue making payments? A. He refused the loan. B. He defaulted on the loan. C. He unsecured the loan. D. He deaffirmed the loan. E. He discharged the loan. Generally, when a debtor fails to make payments on a loan or declares bankruptcy, the debtor has defaulted on the loan. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-06 What is default? Topic: Default 30-45 Chapter 30 - Secured Transactions 51. (p. 663) Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the term for the type of agreement Dennis had with ABC Electronics? A. A pledged money interest. B. A collateralized interest. C. A purchase-money security interest. D. A security perfection interest. E. A cash deferred security interest. According to the UCC, a PMSI exists when a security interest is retained or taken by (1) the seller of the collateral to secure part or all of the purchase price or (2) a person who gives something of value to the debtor so that the debtor can gain rights to or use of the collateral (9-103). AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-02 How are secured interests created? Topic: Creation of Secured Interests 30-46 Chapter 30 - Secured Transactions 52. (p. 665) Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is correct regarding the statement of Dennis that the security interest was not perfected? A. Dennis is wrong because the security interest perfected immediately. B. Dennis is correct because the security interest perfected when he was still in possession of the collateral 30 days after the purchase. C. Dennis is correct because the security interest perfected when he was still in possession of the collateral 60 days after the purchase. D. Dennis is correct because in the case of luxury goods, a financing statement must be filed within 10 days. E. Dennis is correct because in the case of luxury goods, a financing statement must be filed within 20 days. When a creditor sells a consumer good to a debtor on a credit basis or a creditor extends a loan to a debtor for the purchase of a consumer good, the security interest in the good perfects automatically. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 30-47 Chapter 30 - Secured Transactions 53. (p. 662) Reference: "Overextended debtor." Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics. Later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the correct designation for the television in the agreement between Dennis and the electronic store? A. Pledged goods. B. Acknowledged goods. C. Collateral. D. Defined security. E. Illegal security. Collateral is the property that is subject to the security interest. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-01 What are the important definitions associated with secured transactions? Topic: Important Definitions Associated with Secured Transactions 30-48 Chapter 30 - Secured Transactions 54. (p. 663) Reference: "Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car as the collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics to use in her business. XYZ obtained a purchase money security interest on the computer and filed a financing statement. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. After the security interest with the bank was agreed upon, which of the following is the proper designation for any equipment that Molly obtains that would be subject to the bank's security interest? A. After-acquired property. B. Post-dated property. C. Cover property. D. Post-security property. E. There is no title for such property because such property may not validly be the subject of the security interest. After-acquired property is property acquired by the debtor after the security agreement is made. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-04 What is the scope of a security interest? Topic: The Scope of a Security Interest 30-49 Chapter 30 - Secured Transactions 55. (p. 670) Reference: "Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car as the collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics to use in her business. XYZ obtained a purchase money security interest on the computer and filed a financing statement. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. Which of the following is true regarding priority to the computer? A. The bank had priority because the computer was considered after-acquired property properly covered by the initial security interest. B. XYZ Electronics had priority because XYZ Electronics has a purchase-money security interest in the computer. C. XYZ Electronics had priority only if XYZ Electronics perfected its security interest within 10 days of the purchase. D. XYZ Electronics had priority only if XYZ Electronics perfected its security interest within 20 days of the purchase. E. The bank had a security interest in the computer because it perfected its security interest before XYZ Electronics did so. If the PMSI is in noninventory collateral, the PMSI has priority over any other secured perfected interests as long as the PMSI is perfected within 20 days of the debtor's possession of the collateral [9-324(a)]. AACSB: Reflective Thinking Bloom's: Apply Difficulty: Hard Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 30-50 Chapter 30 - Secured Transactions 56. (p. 668) Reference: "Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car as the collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics to use in her business. XYZ obtained a purchase money security interest on the computer and filed a financing statement. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. What should the bank have done to terminate its interest in any property of Molly? A. The bank should have filed a termination statement. B. The bank should have filed an ending statement. C. The bank should have filed a waiver statement. D. The bank should have filed a release statement. E. The bank should have filed a stopgap statement. A termination statement is an amendment to a financing statement that provides that the debtor has no obligation to the secured party [9-513(a)]. AACSB: Reflective Thinking Bloom's: Apply Difficulty: Hard Learning Objective: 30-04 What is the scope of a security interest? Topic: Termination of a Security Interest 30-51 Chapter 30 - Secured Transactions 57. (p. 669) Reference: "Dry Cleaning." Molly wanted to start her own dry cleaning business. She borrowed $50,000 from ABC Bank. She used her car as the collateral and also gave ABC Bank an interest in any property she acquired after the security interest was made. The bank perfected its interest. Molly purchased a new computer from XYZ Electronics to use in her business. XYZ obtained a purchase money security interest on the computer and filed a financing statement. Molly was having problems with cash flow and failed to make payments to XYZ Electronics on the new computer. The electronics store sought to repossess the computer, but the bank opposed that. Molly's business picked up and she was able to completely repay her loan to the bank. She requested that the bank discontinue its security interest, but the bank did not do so as requested by Molly, and still had not done so 45 days after Molly had paid off the loan and requested that the bank terminate its interest. Which of the following is true regarding any compensation that Molly is entitled to from the bank because the bank did not timely file notice that it had no interest in her goods? A. She may recover $100 from the bank. B. She may recover $200 from the bank. C. She may recover $500 from the bank. D. She may recover $1,000 from the bank. E. She may recover $5,000 from the bank. If the secured party does not file a termination statement, the debtor may recover $500 from the secured party [9-625(e)]. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-04 What is the scope of a security interest? Topic: Termination of a Security Interest 30-52 Chapter 30 - Secured Transactions 58. (p. 673) Reference: "Repossession." Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina was under the belief that her only option was to take possession of the collateral. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway one evening at midnight and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's belief that her only option was to take possession of the collateral? A. Tina was correct regardless of whether a vehicle or another type of good was involved. B. Tina was correct, but only because a vehicle was involved. C. Tina was incorrect, because only when a vehicle is involved, a party must disregard the collateral and proceed to judgment. D. Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina only had the right to ignore the collateral and proceed to judgment. E. Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina had the right to either take possession of the collateral or ignore rights in the collateral and proceed to judgment. If the secured party is unable to repossess the property without breaching the peace, the party will file suit against the debtor to obtain a court order for the debtor to turn over the property. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-06 What is default? Topic: Default 30-53 Chapter 30 - Secured Transactions 59. (p. 673) Reference: "Repossession." Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina was under the belief that her only option was to take possession of the collateral. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway one evening at midnight and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's repossession of the pick-up truck? A. She breached the peace in recovering the collateral. B. Tina did not breach the peace in recovering the collateral unless Joan can establish the existence of actual injuries. C. Tina did not breach the peace because she was entitled to repossess the vehicle and any injury sustained by Joan was her own fault. D. Tina breached the peace, but only because she did not provide Joan with prior notification that she was coming to repossess the collateral. E. Tina breached the peace, but only because she acted to repossess the collateral after 10:00 p.m. at night. While the secured party may act without any court order to retain possession of the property, the secured party may not "breach the peace" in repossessing the property. What exactly is breaching the peace? The UCC does not define the phrase. Generally, if the secured party can repossess the collateral without using force or committing trespass, the action is not a breach of the peace. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-06 What is default? Topic: Default 30-54 Chapter 30 - Secured Transactions 60. (p. 668) Reference: "Repossession." Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina was under the belief that her only option was to take possession of the collateral. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway one evening at midnight and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's taking possession of Barry's convertible? A. Tina breached the peace because she did not provide Barry prior notification that she was going to repossess the vehicle. B. Tina breached the peace because she took the vehicle from a public lot. C. Tina breached the peace unless she can establish that Barry gave her prior permission to repossess the vehicle in a public lot. D. Tina did not breach the peace because she acted in a reasonable manner in taking the collateral. E. Tina did not breach the peace because Barry sustained no documented physical injury. While the secured party may act without any court order to retain possession of the property, the secured party may not "breach the peace" in repossessing the property. What exactly is breaching the peace? The UCC does not define the phrase. Generally, if the secured party can repossess the collateral without using force or committing trespass, the action is not a breach of the peace. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 30-06 What is default? Topic: Default 30-55 Chapter 30 - Secured Transactions Essay Questions 61. (p. 662) Set forth the steps that a creditor must take to become a secured party. To become a secured party, the creditor must gain a security interest in the collateral of the debtor. The secured party must take the following three steps to create a security interest: (1) The two parties create a security agreement and either (a) there is a record of the security agreement (usually a written agreement that describes the collateral and is signed by the debtor) or (b) the secured party is in possession of the collateral; (2) The secured party must give value to get the security agreement; and (3) The debtor has a right in or to the collateral. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-02 How are secured interests created? Topic: Creation of Secured Interests 62. (p. 667) What does the UCC provide regarding protection in movable collateral that is moved from one state to another? According to the UCC, a security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the state. The secured party may reperfect the interest in the new state. However, if the interest is not reperfected, the secured party may lose its protection. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 30-03 How are secured interests perfected? Topic: Perfected Security Interest 30-56 Chapter 30 - Secured Transactions 63. (p. 665) List three advantages associated with perfection by possession. First, a secured party does not have to go through the hassle of filing a financing statement. Second, there is little chance that another party will loan money to the debtor relying on the collateral that another secured party possesses. Third, if the debtor defaults on the loan, the secured party already has possession of the collateral, so there is no trouble in trying to repossess. AACSB: Analytic Bloom's: Analysis Difficulty: Hard Learning Objective: 30-06 What is default? Topic: Default 64. (p. 672) Everett buys a new bicycle on credit from Bicycle City. Bicycle City has a security agreement for a purchase-money security interest in the bicycle. Everett, however, discovers that he does not have enough money to pay his rent. Therefore, he sells his bicycle to his neighbor, Helen, who is unaware of Bicycle City's security interest in the bicycle. Everett fails to make payments on the bicycle and Bicycle City seeks to repossess it. Discuss the rights and obligations of the parties. Under the UCC, as long as Helen, the buyer, was not aware of the security interest of Bicycle City, purchased the bicycle for her personal use, and purchased it before the secured party filed a financial statement, then she obtains the bicycle free of the security interest. In this case, assuming Bicycle City did not file any type of financing statement, Helen has the bicycle free and clear. AACSB: Analytic Bloom's: Evaluate Difficulty: Hard Learning Objective: 30-05 How are disputes regarding priority handled? Topic: Priority Disputes 30-57 Chapter 30 - Secured Transactions 65. (p. 672) What rights, if any, does a creditor who does not wish to repossess collateral have in the event of a default and why might a creditor prefer a remedy other than repossession of collateral? Rather than repossessing collateral, a secured party can sue the debtor for the entire amount of the debt. A creditor might wish to do so if the value of the collateral was far less than what was owed to the creditor. Repossession may also be difficult. Students may also have other ideas on that issue. AACSB: Analytic Bloom's: Create Difficulty: Hard Learning Objective: 30-06 What is default? Topic: Default 30-58

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LSU - BLAW - 3201
Chapter 31 - Other Creditors Remedies and SuretyshipChapter 31Other Creditors Remedies and SuretyshipTrue / False Questions1. Creating a mechanic's lien on property automatically ensures that the contractor who filedthe lien will receive money.True
LSU - BLAW - 3201
Chapter 32 - Bankruptcy and ReorganizationChapter 32Bankruptcy and ReorganizationTrue / False Questions1. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 included onlyminor changes to bankruptcy law.True False2. Before a debtor
LSU - BLAW - 3201
Chapter 33 - Agency Formation and DutiesChapter 33Agency Formation and DutiesTrue / False Questions1. Agency law is primarily federal law.True False2. An agency relationship may be created only for a lawful purpose.True False3. An individual who l
LSU - BLAW - 3201
Chapter 34 - Liability to Third Parties and TerminationChapter 34Liability to Third Parties and TerminationTrue / False Questions1. When making decisions about an agency relationship's liability to third parties, courts mustfirst identify whether pro
LSU - BLAW - 3201
Chapter 35 - Forms of Business OrganizationChapter 35Forms of Business OrganizationTrue / False Questions1. A sole proprietor is considered a separate legal entity.True False2. A limited partnership is one in which the partners share management resp
LSU - BLAW - 3201
Chapter 36 - Partnerships: Nature, Formation, and OperationChapter 36Partnerships: Nature, Formation, and OperationTrue / False Questions1. No partnership is created based upon an employer sharing profits with an employee aspayment for work.True Fal
LSU - BLAW - 3201
Chapter 37 - Partnerships: Termination and Limited PartnershipsChapter 37Partnerships: Termination and Limited PartnershipsTrue / False Questions1. Before a partnership may be terminated, the partnership must experience the winding-upstage, but not t
LSU - BLAW - 3201
Chapter 38 - Corporations: Formation and FinancingChapter 38Corporations: Formation and FinancingTrue / False Questions1. A corporation must be dissolved if over 50% of the shareholders die.True False2. Corporations have only those powers that state
LSU - BLAW - 3201
Chapter 39 - Corporations: Directors, Officers, and ShareholdersChapter 39Corporations: Directors, Officers, and ShareholdersTrue / False Questions1. Different agendas between officers and shareholders can lead to conflict within acorporation.True F
LSU - BLAW - 3201
Chapter 40 - Corporations: Mergers, Consolidations, TerminationsChapter 40Corporations: Mergers, Consolidations, TerminationsTrue / False Questions1. Today, consolidations are very rare.True False2. The boards of directors of all involved corporatio
LSU - BLAW - 3201
Chapter 41 - Corporations: Securities and Investor ProtectionChapter 41Corporations: Securities and Investor ProtectionTrue / False Questions1. If a violation of federal securities laws is serious enough to merit criminal prosecution, theFraud Sectio
LSU - BLAW - 3201
Chapter 42 - Employment and Labor LawChapter 42Employment and Labor LawTrue / False Questions1. The Fair Labor Standards Act covers employers engaged in intrastate commerce or theproduction of goods for interstate commerce.True False2. Leave provid
LSU - BLAW - 3201
Chapter 43 - Employment DiscriminationChapter 43Employment DiscriminationTrue / False Questions1. The concept of employment-at-will excludes the concept that an employee may quit atanytime.True False2. State laws may give employees less, but not mo
LSU - BLAW - 3201
Chapter 44 - Administrative LawChapter 44Administrative LawTrue / False Questions1. Administrative law consists of procedural, but not substantive, rules.True False2. Administrative agencies are located at the federal level only.True False3. There
LSU - BLAW - 3201
Chapter 45 - Consumer LawChapter 45Consumer LawTrue / False Questions1. A consumer law is a statute or administrative rule serving to protect consumer interests.True False2. The existence of deceptive advertisements is enough alone to prove damages
LSU - BLAW - 3201
Chapter 46 - Environmental LawChapter 46Environmental LawTrue / False Questions1. Pollution has not always been seen as a problem in the U.S.True False2. A nuisance arises when one person uses his or her property in a manner that unreasonablyinterf
LSU - BLAW - 3201
Chapter 47 - Antitrust LawChapter 47Antitrust LawTrue / False Questions1. A business arrangement in which stock owners appoint beneficiaries and place theirsecurities with trustees who manage the company and pay a share of their earnings to thestock
LSU - BLAW - 3201
Chapter 48 - The Nature of Property, Personal Property, and BailmentsChapter 48The Nature of Property, Personal Property, and BailmentsTrue / False Questions1. Ownership of property is referred to as "title."True False2. A promise to make a gift is
LSU - BLAW - 3201
Chapter 49 - Real PropertyChapter 49Real PropertyTrue / False Questions1. Real property is commonly referred to as "realty."True False2. Subleasing of leased property by the tenant to another party is permissible unlessspecifically prohibited by th
LSU - BLAW - 3201
Chapter 50 - Landlord-Tenant LawChapter 50Landlord-Tenant LawTrue / False Questions1. If a landlord retains control of and access to property, the relationship is likely not alandlord-tenant relationship because the tenant does not have an exclusive
LSU - BLAW - 3201
Chapter 51 - Insurance LawChapter 51Insurance LawTrue / False Questions1. Insurance is defined as a contract in which the insured party makes payments to the insurerin exchange for the insurer's promise to make payment or transfer goods to another pa
Kentucky - CS - 101
Cloud Computing Cloud computing is a general term used to describe a new class of network basedcomputing that takes place over the internet, basically a step on from Utility Computing. This is a collection/group of integrated and networked hardware, so
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 1 Homework1.award:4 out of4 pointsExercise 1-10 Classification of Costs as Variable or Fixed and as Selling and Administrative orProduct [LO3, LO6]Classify each cost as either variable or fixed with respect to the numb
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 1 Class notesWork of management and need for managerial accounting 3 main activities or functions of management at all levels or types a. Planning Identifying alternatives, selecting basic strategy, planning course of acti
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 1 Practice[The following information applies to the questions displayed below.]The PC Works assembles custom computers from components supplied by various manufacturers. The company isvery small and its assembly shop and r
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 2 Homework[The following information applies to the questions displayed below.]Estimated cost and operating data for three companies for the upcoming year follow:Company XCompany YCompany ZDirect labor-hours84,00048,0
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 2 Class NotesLogic of absorption costing for products-Most external financial reports require it to be used.Very commonly used for management reporting and decision making.Also titled fully absorbed costing since all cost
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 2 Practice1.award:1 out of1 pointWhich would be more appropriate in each of the following situationsjob-order costing or process costing?a.An Elmer's glue factory.b.A textbook publisher such as McGraw-Hill.c.An Exxon
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 3 HomeworkExercise 3-6 Cost Flows in Activity-Based Costing [LO2, LO5][The following information applies to the questions displayed below.]Sylvan Company uses activity-based costing to determine product costs for external
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 3 Class NotesProgression of overhead cost calculations (3 basic types) 1. Plant-wide overhead rate is simplest to compute, but inaccurately assigns costs toproducts when a variety of products exist. Relies on one driver fo
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 3 Practice[The following information applies to the questions displayed below.]Kramer Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing systemhas the following seven activity
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 4 Homework1.award:2 out of2 pointsChocolaterie de Geneve, SA, is located in a French-speaking canton in Switzerland. The company makes chocolatetruffles that are sold in popular embossed tins. The company has two proces
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 4 Class NotesProcess costing versus job costing 1. Process costing is used for homogeneous or uniform products produced on a relativelycontinuous basis. Most products in the facility are very similar and use a similar proc
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 4 Practice1.award:1 out of1 pointQuality Brick Company produces bricks in two processing departmentsMolding and Firing. Information relatingto the company's operations in March follows:a. Raw materials were issued for
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 5 Homework1.award:1 out of1 pointExercise 5-7 Cost Behavior; High-Low Method [LO1, LO3]Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if atruck is driven 10
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 5 Class NotesCost behavior how a cost changes as the level of activity (number of units made or consumed)changes.Why do we need to understand cost behavior a managerial accountant is involved in planningand predicting fut
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 5 Practice[The following information applies to the questions displayed below.]The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and thenumber of occupancy-days over
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 6 Homework1.award:4 out of4 pointsLindon Company is the exclusive distributor for an automotive product that sells for $40 per unit and has a CMratio of 38%. The company's fixed expenses are $197,600 per year. The compa
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter # 6 Class NotesCVP Cost volume profit is an analysis tool that focuses on the interaction between prices ofproduct, volume of activity (number of units), variable costs, fixed costs, and mix of productssold. This allows ma
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 6 Practice[The following information applies to the questions displayed below.]Whirly Corporation's most recent income statement is shown below:Sales (8,000 units)Variable expensesContributionmarginFixed expensesNet o
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 7 HomeworkExercise 7-12 Production and Direct Materials Budgets [LO3, LO4][The following information applies to the questions displayed below.]The marketing department of Gaeber Industries has submitted the following sales
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 7 Class NotesBudgeting - why and how and to avoid pitfalls Each business prepares a yearly budget or profit plan for their future which goes back to thatvery first task of a managerial accountant planning and ends with the
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 7 Practice[The following information applies to the questions displayed below.]Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of eachyear, as shown in the company'
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 8 Homework1.award:2 out of2 pointsExercise 8-8 Flexible Budget [LO1]Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal.The following table provides data concerni
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 8 Class notesStatic planning budget A budget prepared at the beginning of the year and valid only for thebudgeted level of activity (planned number of sales units). This was the logic of the masterbudget in chapter 7. It w
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 8 Practice1.award:1 out of1 pointFlight Caf is a company that prepares in-flight meals for airlines in its kitchen located next to the local airport. Thecompany's planning budget for July follows:Flight CafPlanning Bu
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 9 Homework1.award:2 out of2 pointsHuron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct laborstandards for one unit of Zoom are given below:StandardQuantityor HoursDire
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 9 class notesStandard cost an expected or benchmark cost for the direct material, direct labor and overheadconsumed in the manufacturing process for any given product. It is set based on knowledge ofthe process and materia
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 9 Practice1.award:0 out of1 pointMartin Company manufactures a powerful cleaning solvent. The main ingredient in the solvent is a raw materialcalled Echol. Information concerning the purchase and use of Echol follows:P
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 10 HomeworkExercise 10-8 Evaluating New Investments Using Return on Investment (ROI) and Residual Income[LO2, LO3][The following information applies to the questions displayed below.]Selected sales and operating data for
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 10 Class notesDecentralized an organization that does not confine decision making to just top executives butspreads it around to managers that understand the business in depth. Responsibility can beassigned for the decisio
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 10 Practice1.award:1 out of1 pointRoyal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and costinformation relating to the products follow:Selling price per unitVariable expe
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 11 Homework1.award:3 out of3 pointsExercise 11-8 Dropping or Retaining a Segment [LO2]Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses onits bilge pump product li
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 11 Class notesRelevant cost and its purpose in segment reportingRelevant cost a cost or benefit that will be different depending on the alternative chosen. Itwill affect the income or cost total for a segment. Also referred
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 11 Practice[The following information applies to the questions displayed below.]The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike.Data on sales and expenses for the
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 12 Homework1.award:3 out of3 pointsExercise 12-7 Basic Net Present Value Analysis [LO1]Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return thatshe is earning. For
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter #12 Class NotesCapital budgeting and the types of decisions involved Capital budgeting the planning process managers use for long-term decisions such as newequipment or product introductions. Uses the long-term vision of t
DePaul - ACCOUNTING - 102
Managerial Accounting Chapter 12 Practice1.award:1 out of1 pointThe management of Kunkel Company is considering the purchase of a $29,000 machine that would reduceoperating costs by $6,900 per year. At the end of the machine's nine-year useful life,
DePaul - ACCOUNTING - 101
ACC 101 Chapter 11.award:8 out of8 pointsTootsie Roll Industries manufactures and sells more than 60 million Tootsie Rolls and 20 million Tootsie Roll Popseach day. The following items were listed on Tootsie Roll's recent income statement and balanc
DePaul - ACCOUNTING - 101
ACC 101 Chapter 21.award:8 out of8 pointsComplete the following table by selecting either increases or decreases in each column.DebitCreditAssetsIncreasesDecreasesLiabilitiesDecreasesIncreasesStockholders' EquityDecreasesIncreaseseBook Li
DePaul - ACCOUNTING - 101
Acc 101 Chapter 31.award:15 out of15 pointsThe following transactions are February 2010 activities of Swing Hard Incorporated, which offers indoor golfinglessons in the northeastern United States. If revenue is to be recognized in February, indicate