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Ch16-TB-BLTE-8e

Ch16-TB-BLTE-8e - Chapter16 CreditorsRights andBankruptcy...

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Chapter 16 Creditors’ Rights and Bankruptcy TRUE/FALSE QUESTIONS 1. A security interest is enforceable only if the collateral is  not  in the debtor’s  possession. ANSWER: F PAGE: 477 TYPE: + MISC: AACSB Analytic Skill Level: AICPA Legal 2. A secured party is a person who owes the payment of a secured obligation. ANSWER:  F PAGE: 477 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 3. A security interest is   not   enforceable   before   the creditor’s rights have at- tached to the collateral. ANSWER: T PAGE: 477 TYPE: + MISC: AACSB Analytic Skill Level: AICPA Legal 4. For a  creditor  to have an enforceable security interest, the  debtor  must have  title to the collateral. ANSWER:  F PAGE: 478 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 5. An improper filing renders a secured party unperfected. 239
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240 TEST BANK TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS ANSWER: T PAGE: 480 TYPE: + MISC: AACSB Analytic Skill Level: AICPA Legal
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CHAPTER 16: CREDITORS’ RIGHTS AND BANKRUPTCY 241 6. A purchase-money security interest arises only when a buyer “purchases”  goods with “money.” ANSWER: F PAGE: 481 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 7. A financing statement is effective for five years from the date of filing. ANSWER:  T PAGE: 482 TYPE: + MISC: AACSB Analytic Skill Level: AICPA Legal 8. A continuation statement is effective only if it is filed within six months  before  the expiration of a financing statement. ANSWER:  T PAGE: 482 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 9. The concept of the floating lien does  not  apply to future advances. ANSWER:  F PAGE: 482 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 10. A perfected security interest will always have priority over an unperfected  security interest. ANSWER:  T PAGE: 483 TYPE: + MISC: AACSB Analytic Skill Level: AICPA Legal 11. When two parties have  perfected  security interests in the same collateral,  neither party has priority. ANSWER: F PAGE: 485 TYPE: + MISC: AACSB Analytic Skill Level: AICPA Legal 12. An artisan’s lien is effective only if a creditor has possession of the property. ANSWER: T PAGE: 487 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 13. A creditor with an artisan’s lien on property can sell the property to satisfy  the debt.
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242 TEST BANK TO ACCOMPANY BUSINESS LAW TODAY: THE ESSENTIALS ANSWER: T PAGE: 487 TYPE: N MISC: AACSB Analytic Skill Level: AICPA Legal 14. A court may  not  order an employer, as a result of a garnishment proceed- ing, to turn over a debtor-employee’s property to pay a debt.
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