Chapter 12 and 13 in class questions

Karen's Kitchens renovates Mark's old kitchen. Mark only pays part of his bill. To help try to collect the rest of the money owed her, Karen may obtain: A. An artisan's lien B. A writ of certiorariC. A lien of circumstance D. A mechanic's lien

A mechanic's lien

Dissolution of a partnership takes place, unless otherwise provided for by contract, in the following instances except: A. Death of a partner B. Bankruptcy of a partner C. Change in financial condition of a partner D. All of the choices would require dissolution

Change in financial condition of a partner

Proprietorship must file a federal tax return in the name of the business, if there is positive income. a. True b. False

False

When a business lends another business money, it should perfect its security interest by: A. Applying to the IRS for security. B. Filing its financing statement with the state's Secretary of State. C. Preparing a late-term guarantor. D. None of the choices are correct.

Filing its financing statement with the state's Secretary of State.

Fern TV sells Ryan a 52" plasma television. Ryan does not have the cash necessary to buy the TV, so Fern allows him to make 12 monthly payments which Ryan agrees to in a signed writing. If Ryan misses any payments, Fern may take the TV back. Fern: A. Is a perfected debtor. B. Is an unsecured creditor with a perfected interest. C. Is an unsecured creditor. D. Has a security interest.

Has a security interest.

If the principal does not pay the creditor, and the surety has to satisfy the debt, the principal: A. Is not obligation to repay the surety. B. Is only obligated to repay the surety 25% of the debt. C. Is only obligated to repay the surety 50% of the debt. D. Is obligated to repay the surety.

Is obligated to repay the surety.

Which of the following is not true about a partnership? A. It is always an independent legal entity. B. Partners share control over the business operation. C. Partners co-own the business. D. It must be owned by two or more people.

It is always an independent legal entity.

Revolving Account

Make minimum payments and can add new debt (credit card)

Don borrows $90,000 to buy a home. His mortgage is with Western Bank. Don is unable to make his mortgage payments. Western forecloses on Don's house and sells it in a judicial sale. The bank gets $95,000 for the house. In this case, it: A. Must return the extra $5,000 to Don. B. Should seize Don's personal property to satisfy its claims. C. Must obtain a mechanic's lien against Don. D. Must pay the Secretary of State for the expenses the office has incurred.

Must return the extra $5,000 to Don.

In a(n) ____, goods and services are sold on an invoice that shows transactions; full payment is expected within a fixed time period. A. Security Account B. Revolving Account C. Installment Account D.None of the choices are correct

None of the choices are correct

A partnership can begin with either a(n) ____ or a(n) ____. A. Implied agreement; loan agreement. B. Oral agreement; implied agreement. C. Oral agreement; forced agreement. D. Oral agreement; false agreement.

Oral agreement; implied agreement.

Installment Account

Repays loan through regular payment schedule (mortgage loan)

Subrogation

Surety is entitled to the same rights of the creditor against debtor

A Surety

Surety makes an unconditional promise to pay the debts of the debtor. The principal debtor is the original debtor

Billy wants to borrow $10,000 to start a male belly dancing business. Creditors are not anxious to lend him the funds. Billy convinces Gary to back-up his credit. Gary is: A. The surety B. The testator C. The principal D. The grantor

The surety

The primary distinction in secured credit transaction is whether the property: a. may or may not be stored b. is tangible or intangible c. is insured or not d. is money or something else e. is real or personal

is real or personal

Mechanic's Lien

mechanic's lien is a lien on real property for improvements/repair

Candy bought a sofa from Max on credit. She is to make 5 monthly payments of $200 each. After one month Candy stops making payments. Max is a secured creditor; he may: a. none of the other choices b. may enter Candy's home at any time to take the sofa c. force Candy to turn over the sofa plus other property to make up for Max's time and efforts spent on collection d. do nothing because personal property may not be reclaimed e. require Candy to perform manual labor in exchange for the cash payments

none of the other choices

Open Account

shows transactions, must be paid within fixed time period (net 30)

When a creditor extends credit to a debtor, to protect itself, the creditor should: a. make sure that its security interests are not perfected b. take a security interest in an asset owned by the debtor and make sure to attach any security interest it takes c. take a security interest in an asset owned by the debtor and make sure to attach any security interest it takes and make sure the security interests are not perfected d. take a security interest in an asset owned by the debtor e. make sure to attach any security interest it takes

take a security interest in an asset owned by the debtor and make sure to attach any security interest it takes