TJ_Comp 20_TB_Ch34

TJ_Comp 20_TB_Ch34 - Chapter 34SECURED TRANSACTIONS IN...

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Chapter 34—SECURED TRANSACTIONS IN PERSONAL PROPERTY TRUE/FALSE 1. A security interest gives a creditor more protection than is afforded by a right to sue on the debt. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. A security interest is a property right that enables the creditor to take possession of the property if the debtor does not pay the amount owed. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 3. Attachment refers to the creation of a security interest. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 4. In a security agreement, the creditor and the debtor agree that the creditor has a security interest. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 5. A security interest may be possessory or nonpossessory. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. A security agreement need not describe the collateral involved. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. In most cases, value, which allows attachment of a security interest, is any consideration that supports a simple contract. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 8. For a security interest to attach, the creditor must file a financing statement. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 9. A debtor has sufficient rights in the collateral for a security interest to attach only if the debtor owns the collateral. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 10. There is no limit placed on the extent to which after-acquired property may be bound by a security in- terest. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 11. Consumer goods are classified into different categories based on the debtor's intended use, not the physical characteristics of the goods. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic
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12. Grund, a night-club performer, financed the purchase of a drum to be used in his night-club act. The collateral is classified as a consumer good. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 13. A secured transaction covers proceeds from the collateral unless such interest is expressly excluded. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 14. When a security interest in property is inferior to other interests and claims to the property, it is said to be perfected. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 15. A security interest need only be attached, not perfected, if there are no competing claims for the collat- eral. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 16. Attachment provides creditors with rights. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 17. Perfection can occur merely by possession of the collateral by the creditor. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 18. Consumer goods are not subject to perfection. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 19. Filing is not required to perfect a security interest in equipment. ANS: F
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TJ_Comp 20_TB_Ch34 - Chapter 34SECURED TRANSACTIONS IN...

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