Mann_TB_Ch38

Mann_TB_Ch38 - Chapter 38Secured Transactions and...

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Chapter 38—Secured Transactions and Suretyship TRUE/FALSE 1. Use of a charge card is not a secured transaction within the meaning of UCC Article 9. ANS: T PTS: 1 2. A bond, which is an evidence of indebtedness, may serve as collateral. ANS: T PTS: 1 3. Goods and other inventory items cannot be used as collateral. ANS: F PTS: 1 4. If a security interest has been attached, it is enforceable against the debtor. ANS: T PTS: 1 5. "Perfection" is required in order for the secured party to enforce rights against the debtor. ANS: F PTS: 1 6. Under most circumstances, a creditor who files a completed financing statement can be assured that the security interest is perfected. ANS: T PTS: 1 7. A debtor must sign a written security agreement for a pledge used to secure a loan. ANS: F PTS: 1 8. A buyer in the ordinary course of business takes collateral free of a perfected security interest created by the buyer’s seller. ANS: T PTS: 1 9. If Sharpe Finance Co. has a secured interest in Jeff's car and Jeff is in default, in most states Sharpe may take the car from in front of Jeff's house without getting a court order. ANS: T PTS: 1 10. First Bank repossessed Bob’s television after he missed two $50 payments on it. He came to the bank with the $100 plus service charges. The bank will have to give him the television as long as they have not disposed of the television or have not made a contract to sell it. ANS: T PTS: 1 11. A security agreement may include only presently owned inventory, accounts, or equipment of the debtor, not property that is subsequently acquired.
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ANS: F PTS: 1 12. UCC Article 9 defines a secondary obligor as being a consignee. ANS: F PTS: 1 13. Revised Article 9 of the Code greatly complicates the provisions regarding the place(s) for filing a fin- ancing statement. ANS: F PTS: 1 14. If a secured party moves within the state after filing the financing statement, the filing becomes inef- fective. ANS: F PTS: 1 15. First Finance Company perfected its security interest in Donald's auto on March 1. Second Finance Company perfected its security interest in the same auto on April 1. If both parties have properly filed their finance statements, First Finance Company has a priority interest in the auto. ANS: T PTS: 1 16. A purchase money security interest in equipment takes priority over a conflicting security interest if the purchase money interest is perfected within thirty days of the debtor's receipt of the goods. ANS: F PTS: 1 17. An automobile buyer in the ordinary course of business will take free and clear of a security interest created by any person who owned the automobile prior to the dealer. ANS: F PTS: 1 18. If two parties have unperfected security interests in the same collateral, the first to attach has priority.
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Mann_TB_Ch38 - Chapter 38Secured Transactions and...

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