Acct 340 Exam 1

Personal property includes​ _____ property such as​ equipment, vehicles,​ furniture, and​ jewelry, as well as​ _____ property such as​ securities, patents,​ trademarks, and copyrights. A. ​tangible; intangible B. ​intangible; physical C. ​real; physical D. ​intangible; tangible E. ​tangible; real

A. ​tangible; intangible

A(n) ________ petition can be filed by the debtor in​ ________ bankruptcy cases. A. ​voluntary; Chapters​ 7, 11, 12 and 13 B. ​voluntary; Chapters 12 and​ 13, but not in Chapters 7 and 11 C. ​voluntary; Chapters 7 and​ 11, but not in Chapters 12 and 13 D. ​involuntary; Chapters 7 and​ 11, but not in Chapters 12 and 13 E. ​involuntary; Chapters​ 7, 11, 12 and 13

A. ​voluntary; Chapters​ 7, 11, 12 and 13

Intentional torts include all but which of the​ following? A. false imprisonment B. negligence C. battery D. assault E. intentional infliction of emotional distress

B. negligence

A power of attorney is an​ _____ agency agreement that is often used to give​ a(n) _____ the power to sign legal documents on behalf of the​ _____. A. ​express; principal; agent B. ​express; agent; principal C. ​implied; agent; principal D. ​implied; principal; agent E. ​express; third party​ beneficiary; incidental beneficiary

B. ​express; agent; principal

Which of the following is NOT a required procedure for filing a voluntary bankruptcy​ petition? A. ​pre-petition counseling B. ​post-petition counseling C. a statement of the financial affairs of the debtor D. a statement of the​ debtor's monthly​ income; current income and expenses E. attorney certification

B. ​post-petition counseling

Power of​ _____ is a power stated in a mortgage or deed of trust that permits​ _____ without court proceedings and sale of the property through auction. A. ​attorney; reconveyance B. ​sale; foreclosure C. ​sale; remuneration D. ​attorney; reclamation E. ​sale; execution

B. ​sale; foreclosure

Article 9 of the Uniform Commercial Code​ (UCC) governs​ _____ transactions in​ _____ property. A. ​secured; real B. ​secured; personal C. ​unsecured; intangible D. ​unsecured; real E. ​secured; intangible

B. ​secured; personal

Under the​ _____ test, if an agent commits an intentional tort within a​ work-related time or space—for ​example, during working hours or on the​ principal's premises—the principal is liable for any injuries caused by the​ agent's intentional torts. A. frolic and detour B. ​work-related C. ​worker's compensation D. tacit approval E. coming and going

B. ​work-related

Although the automobile industry is exempt from​ _____ supervision, it is subject to oversight by the​ _____. A. ​CPSC; EPA B. ​FTC; CFPB C. ​CFPB; FTC D. ​CPSC; CFPB E. ​EPA; CPSC

C. ​CFPB; FTC

​A(n) _____ lien is a security interest in property that was not in the possession of the debtor when the security agreement was executed. A. ​non-collateralized B. unsecured C. floating Your answer is correct. D. elusive E. intangible

floating

A creditor who extends credit to a consumer to purchase a consumer good under a written security agreement obtains​ a(n) _____ security interest in the consumer good. A. equitable B. incidental C. constructive D. symbolic E. purchase money

purchase money

Which of the following is NOT true about a Chapter 13​ bankruptcy? A. A creditor can file an involuntary petition to institute a Chapter 13 case against an individual debtor. B. A creditor cannot file an involuntary petition to institute a Chapter 13 case. C. An individual with regular income means an individual whose income is sufficiently stable and regular to enable him or her to make payments under a Chapter 13 plan. D. The debts of the individual debtor must be primarily consumer debt. E. A Chapter 13 proceeding can be initiated only through the voluntary filing of a petition by an individual debtor with regular income.

A. A creditor can file an involuntary petition to institute a Chapter 13 case against an individual debtor.

Which of the following is NOT true about taking possession of​ collateral? A. After legally repossessing the​ goods, the secured party must sell the collateral. B. A secured party may repossess the collateral pursuant to judicial process or without judicial process if the​self-help repossession of the collateral does not breach the peace. C. Many debtors peacefully allow a secured creditor to repossess goods. D. After legally repossessing the​ goods, the secured party can retain the collateral. E. If​ necessary, a secured creditor may obtain a court judgment or warrant to repossess personal property.

A. After legally repossessing the​ goods, the secured party must sell the collateral.

Which of the following is NOT true about an​ agent's duties? A. An agent owes no duty to notify the principal of important information learned concerning the agency. B. An agent who does not perform his or her express duties or who fails to use the standard degree of​ care, skill, or diligence is liable to the principal for damages. C. ​Normally, an agent is required to render the same standard of​ care, skill, and diligence that a fictitious reasonable agent in the same occupation would render in the same locality and under the same circumstances. D. An agent who enters a contract with a principal has a duty to perform the lawful duties expressed in the contract. E. An agent who enters a contract with a principal has a duty to meet the standards of reasonable​ care, skill, and diligence implicit in all contracts.

A. An agent owes no duty to notify the principal of important information learned concerning the agency.

_____ is a situation in which a creditor has an enforceable security interest against a debtor and can satisfy the debt out of the designated collateral. A. Attachment B. Detachment C. Abasement D. Rapprochement E. Denouement

A. Attachment

Cougar Car​ Sales, Inc.​ (Cougar), a new car​ dealership, finances all its inventory of new automobiles at First Bank. First Bank takes a security interest in​ Cougar's inventory of cars and perfects this security interest.​ Kim, a buyer in the ordinary course of​ business, purchases a car from Cougar for cash. If Cougar defaults on its payments to the​bank, _______. A. First Bank cannot recover the car from Kim because she is a purchaser in the ordinary course of business B. First Bank can recover the car from Kim because she is a purchaser in the ordinary course of business C. Cougar can avoid the payments to First Bank because it no longer has the car D. Cougar can recover the car from Kim because she is a purchaser in the ordinary course of business E. First Bank cannot recover the car from Kim because she has a perfected security interest in the car

A. First Bank cannot recover the car from Kim because she is a purchaser in the ordinary course of business

Which of the following is NOT true about a deficiency​ judgment? A. If the underlying transaction is the sale of​ accounts, chattel​ paper, payment​ intangibles, or promissory​notes, the debtor is entitled to any surplus and is not liable for any deficiency. B. If the underlying transaction is the sale of​ accounts, chattel​ paper, payment​ intangibles, or promissory​notes, the debtor is not entitled to any surplus and is not liable for any deficiency. C. Unless otherwise​ agreed, after a​ debtor's default, if the proceeds from the disposition of collateral are not sufficient to pay the expenses incurred by the secured party for the collection and enforcement of the debt and to satisfy the debt to the secured​ party, the debtor is personally liable to the secured party for the payment of the deficiency. D. The parties may agree in their security agreement that the debtor will not be liable for any deficiency. E. A secured party may bring an action to recover a deficiency judgment against the debtor.

A. If the underlying transaction is the sale of​ accounts, chattel​ paper, payment​ intangibles, or promissory​notes, the debtor is entitled to any surplus and is not liable for any deficiency.

Which of the following is NOT true about the Fair Credit Reporting​ Act? A. Information in a consumer credit report may not be provided to a prospective employer. B. Users of the information for​ credit, insurance,​ employment, and other purposes must notify the consumer when an adverse action is taken on the basis of such reports. C. Information in a consumer credit report can only be provided to parties who have a purpose for obtaining the information. D. A credit report cannot be supplied to anyone who does not have a legitimate purpose for using the report as provided in the act. E. If a consumer challenges the accuracy of pertinent information contained in a credit​ file, the agency may be compelled to reinvestigate.

A. Information in a consumer credit report may not be provided to a prospective employer.

​_____ credit requires collateral that secures payment of the loan. A. Secured B. Secondary C. Primary D. Unsecured E. Subprime

A. Secured

Which of the following is NOT true about a meeting of the​ creditors? A. The bankruptcy judge must attend the meeting. B. Creditors may ask questions regarding the​ debtor's financial​ affairs, disposition of property prior to​bankruptcy, possible concealment of​ assets, and similar matters. C. The debtor must appear and submit to​ questioning, under​ oath, by creditors. D. Within a reasonable time after a court grants an order for relief​ (not less than 10 days or more than 30​days), a court must call a meeting of the creditors​ (also called the first meeting of the​ creditors). E. The debtor may have an attorney present at this meeting.

A. The bankruptcy judge must attend the meeting.

Which of the following is NOT true about a proof of claim and proof of​ interest? A. The proof of claim must be timely​ filed, which generally means within 12 months of the first meeting of the creditors. B. A secured creditor whose claim exceeds the value of the collateral may submit a proof of claim and become an unsecured claimant as to the difference. C. The document for filing a proof of claim is provided by the court. D. A creditor must file a proof of claim stating the amount of the claim against the debtor. E. An equity security holder​ (e.g., a shareholder of a​ corporation) must file a proof of interest.

A. The proof of claim must be timely​ filed, which generally means within 12 months of the first meeting of the creditors.

Raymond buys a house for​ $800,000. He puts​ $200,000 down and borrows​ $600,000 from a​ bank, which takes a mortgage on the property to secure the loan. Raymond​ defaults, and when the bank forecloses on the​ property, it is worth only​ $500,000. There is a deficiency of​ $100,000 ($600,000 loan​ ? $500,000 foreclosure sale​ price). The bank​ _____. A. can recover the​ $100,000 deficiency from​ Raymond's other property. B. can exercise its power of sale C. can recover​ $600,000 from​ Raymond's other property D. can exercise its right of redemption E. cannot recover the amount lost

A. can recover the​ $100,000 deficiency from​ Raymond's other property.

The Chapter 7 means test is a calculation that establishes a​ bright-line test to determine whether the debtor has sufficient​ _____ income to pay​ pre-petition debts out of​ post-petition income. A. disposable B. gross C. average D. median E. taxable

A. disposable

Which of the following schedules is NOT required to be submitted by an individual debtor who files a voluntary bankruptcy​ petition? A. evidence of payments received from employers within 120 days prior to the filing of the petition B. a statement of the​ debtor's monthly​ income; current income and expenses C. a list of all property owned D. a statement of the financial affairs of the debtor E. a list of secured and unsecured​ creditors, with addresses

A. evidence of payments received from employers within 120 days prior to the filing of the petition

In many​ situations, a principal and an agent do not expressly create an agency.​ Instead, the agency is inferred from the conduct of the parties. This type of agency is referred to as​ a(n) _____ agency. A. implied B. durable C. reserved D. express E. general

A. implied

The duty of​ _____ is a fiduciary duty owed by an agent not to act adversely to the interests of the principal. A. loyalty B. obedience C. indemnification D. reciprocity E. reservation

A. loyalty

If two or more secured parties have perfected security interests in the same​ collateral, the first to​ _____ has priority. A. perfect B. litigate C. remunerate D. arbitrate E. detach

A. perfect

Which of the following is a duty an agent owes to a​ principal? A. performance B. ratification C. indemnification D. compensation E. subrogation

A. performance

All things that are movable when a security interest attaches are called​ _____ property. A. tangible personal B. intangible personal C. intangible intellectual D. intangible real E. tangible real

A. tangible personal

In​ a(n) _____​ agency, a contracting third party does not know of either the existence of the agency or the​ principal's identity. A. undisclosed B. statutory C. symbolic D. common law E. constructive

A. undisclosed

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that before an individual debtor receives a discharge in a Chapter​ _____ or Chapter​ _____ bankruptcy, the debtor must attend a personal​ _____ course approved by the U.S. Trustee. A. ​7; 13; financial management B. ​7; 11; financial management C. ​7; 13; responsibility D. ​11; 13; financial management E. ​7; 11; responsibility

A. ​7; 13; financial management

Article​ _____ of the Uniform​ _____ Code governs secured transactions where personal property is used as collateral for a loan or the extension of credit. A. ​9; Commercial B. ​2; Commercial C. ​9; Contracts D. ​3; Commercial E. ​3; Contracts

A. ​9; Commercial

Title X of the​ _____ Act, which is titled the Consumer Financial Protection Act of​ 2010, is designed to increase relevant​ _____ regarding consumer financial products and services. A. ​Dodd-Frank; disclosure B. ​Gramm-Rudman; collateral C. ​Gramm-Rudman; market share D. ​Smoot-Hawley; security E. ​Taft-Hartley; market share

A. ​Dodd-Frank; disclosure

Which of the following is an INCORRECT statement regarding a​ principal's liability for an independent​ contractor's torts and​ contracts? A. ​Generally, a principal is liable for the torts of its independent contractors. B. Principals cannot avoid liability for inherently dangerous activities that they assign to independent contractors. C. The reason a principal is not usually liable for the torts of an independent contractor is because the principal does not control the means by which the independent contractor accomplishes results. D. If an independent contractor enters into a contract with a third party on behalf of the principal without express or implied authority from the principal to do​ so, the principal is not liable on the contract. E. Principals are bound by the authorized contracts of their independent contractors.

A. ​Generally, a principal is liable for the torts of its independent contractors.

Form​ _____ is a uniform financing statement form that is used in all states. A. ​UCC-1 B. ​CFPB-1 C. ​SEC-1 D. ​FTC-1 E. ​NYSE-2

A. ​UCC-1

​Saachi, who owns a piece of vacant real​ estate, hires​ Maaksharth, a licensed real estate​ broker, to list the property for sale.​ Ian, an adjacent property owner to​ Saachi's property, tells the agent that a chemical plant has polluted his property and probably​ Saachi's property. The owner is unaware of any pollution and the agent does not tell her. If Saachi sells the property to Mabina and it is later discovered that the property Mabina bought from Saachi is​polluted, would Saachi be​ liable? A. ​Yes, the​ agent's knowledge is imputed to Saachi B. ​No, the buyer had a duty to discover the pollution C. ​No, only the agent can be held liable D. ​Yes, Saachi was negligent in not conducting an environment survey before listing the property E. ​Yes, Saachi has committed fraud

A. ​Yes, the​ agent's knowledge is imputed to Saachi

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires an attorney​ _____ whereby an attorney who represents a client in bankruptcy must certify the accuracy of the information contained in the bankruptcy petition and the​ schedules, under penalty of​ _____. A. ​certification; perjury B. ​addendum; perjury C. ​addendum; conspiracy D. ​certification; conspiracy E. ​warranty; conspiracy

A. ​certification; perjury

A creditor who has the only​ _____ interest in the​ debtor's collateral has priority over​ _____ interests. A. ​secured; unsecured B. ​equitable; contractual C. ​unsecured; secured D. ​conditional; unconditional E. ​constructive; symbolic

A. ​secured; unsecured

The first step in determining whether a debtor qualifies for Chapter 7 relief is to apply the​ _____ income test. A. poverty B. median C. mode D. average E. mean

B. median

The federal exemptions established in the Bankruptcy Code are adjusted every​ _______ to reflect changes in the consumer price index A. 6 months B. 3 years C. 10 years D. 1 year E. 3 months

B. 3 years

Which of the following is NOT true regarding powers of​ attorney? A. To be​ enforceable, powers of attorney must be written. B. A power of attorney may be given verbally. C. A general power of attorney confers broad powers on the agent to act in any matters on the​ principal's behalf. D. A power of attorney is one of the most formal types of express agency agreements. E. In a power of attorney​ relationship, the agent is called an​ attorney-in-fact even though they do not have to be a lawyer.

B. A power of attorney may be given verbally.

Which of the following is an INCORRECT statement regarding dual​ agency? A. Some​ agents, such as middlemen and​ finders, are not considered dual agents. B. As a general​ rule, dual agency is permissible. C. If an agent acts as an undisclosed dual​ agent, he or she must forfeit all compensation received in the transaction. D. An agent cannot meet a duty of loyalty to two parties with conflicting interests. E. Dual agency occurs when an agent acts for two or more different principals in the same transaction.

B. As a general​ rule, dual agency is permissible.

Which of the following is a correct statement regarding bankruptcy​ law? A. Bankruptcy law is exclusively state law. B. Bankruptcy law is exclusively federal law. C. Bankruptcy law consists of both federal and state law. D. New York was the first state to enact its own state bankruptcy law. E. Congress enacted the original federal Bankruptcy Act in 1778.

B. Bankruptcy law is exclusively federal law.

​_____ is a court order that relieves a debtor of the legal liability to pay his or her debts that were not paid in the bankruptcy proceeding. A. Proof of interest B. Discharge C. Proof of claim D. Automatic stay E. Temporary injunction

B. Discharge

_____ agency occurs when an agent acts for two or more different principals in the same transaction. A. Conditional B. Dual C. Cooperative D. Unilateral E. Symbiotic

B. Dual

Which of the following is an INCORRECT statement regarding an agency by​ ratification? A. Once an agency by ratification​ occurs, the agent is relieved of any liability for misrepresentation. B. For an agency by ratification to​ occur, an​ employer-employee relationship must exist between the principal and the agent. C. For an agency by ratification to​ occur, the purported principal must ratify​ (accept) the unauthorized act. D. For an agency by ratification to​ occur, a person must represent​ him- or herself as​ another's agent when in fact he or she is not. E. With the creation of an agency by​ ratification, the principal is legally bound to perform.

B. For an agency by ratification to​ occur, an​ employer-employee relationship must exist between the principal and the agent.

Which of the following is NOT true about the Credit Card​ Act? A. The terms of the credit card agreement must be written in plain English and in no less than​ 12-point font​(thus avoiding​ "legalese" and​ fine-print agreements). B. If cardholders cancel a​ card, their remaining balances are subject to any rate increase. C. Card companies cannot retroactively increase interest rates on existing balances. D. If cardholders cancel a​ card, they have the right to pay off existing balances at the existing interest rate and existing payment schedule​ (e.g., current minimum monthly​ payment). E. Credit cards cannot be issued to individuals under the age of 21​ (the previous minimum age was​ 18) unless they have a​ co-signer (e.g.,​ parent) or they can prove they have the means to pay credit card expenses.

B. If cardholders cancel a​ card, their remaining balances are subject to any rate increase.

Which of the following is NOT true about a Chapter 7​ bankruptcy? A. The claims of secured creditors to the​ debtor's nonexempt property have priority over the claims of unsecured creditors. B. If using the means test​ calculation, a debtor is determined to have a sufficient amount of disposable income as determined by bankruptcy​ law, the debtor qualifies for Chapter 7 bankruptcy. C. In a Chapter 7​ bankruptcy, the property of the estate is​ sold, and the proceeds are distributed to satisfy allowed claims. D. The first step in determining whether a debtor qualifies for Chapter 7 relief is to apply the median income test. E. If a debtor qualifies for a Chapter 7 liquidation​ bankruptcy, the nonexempt property of the bankruptcy estate must be distributed to the​ debtor's secured and unsecured creditors

B. If using the means test​ calculation, a debtor is determined to have a sufficient amount of disposable income as determined by bankruptcy​ law, the debtor qualifies for Chapter 7 bankruptcy.

Which of the following is an INCORRECT statement regarding unsecured​ credit? A. If the debtor is judgment​ proof, the creditor may never collect. B. It requires collateral to protect the payment of the debt. C. The creditor relies on the​ debtor's promise to repay the​ principal, plus any​ interest, when the debt is due. D. In deciding whether to make the​ loan, the unsecured creditor considers the​ debtor's credit​ history, income, and other assets. E. If the debtor fails to make the​ payments, the creditor may bring legal action and obtain a judgment against the debtor.

B. It requires collateral to protect the payment of the debt.

Which of the following is NOT true about a Chapter 11​ bankruptcy? A. A​ debtor-in-possession is empowered to operate the​ debtor's business during the bankruptcy proceeding. B. Only the trustee can be a​ debtor-in-possession. C. In most Chapter 11​ cases, the debtor is left in place to operate the business during the reorganization proceeding. D. Credit extended by​ post-petition unsecured creditors in the ordinary course of business is given automatic priority as an administrative expense in bankruptcy. E. The court may appoint a trustee to operate the​ debtor's business only on a showing of​ cause, such as​fraud, dishonesty, or gross mismanagement of the affairs of the debtor by current management.

B. Only the trustee can be a​ debtor-in-possession.

Which of the following is NOT true about a buyer in the ordinary course of​ business? A. A buyer in the ordinary course of business who purchases goods from a merchant takes the goods free of any perfected or unperfected security interest in the​ merchant's inventory, even if the buyer knows of the existence of the security interest. B. The buyer in the ordinary course of business rule applies to persons who buy farm products from a person engaged in farming operations. C. The buyer in the ordinary course of business rule is often applied to inventory collateral. D. The buyer in the ordinary course of business rule is necessary because buyers would be reluctant to purchase goods if a​ merchant's creditors could recover those goods if the merchant defaulted on loans owed to secured creditors. E. The buyer in the ordinary course of business rule does not apply to persons who buy farm products from a person engaged in farming operations.

B. The buyer in the ordinary course of business rule applies to persons who buy farm products from a person engaged in farming operations.

An​ employer-employee relationship exists when an employer hires an employee to perform some form of physical service but does not give that person​ _____ authority to enter into contracts. A. assignee B. agency C. delegator D. third party beneficiary E. incidental beneficiary

B. agency

A party who agrees to act on behalf of another is called​ a(n) _____. A. assignor B. agent C. incidental beneficiary D. delegator E. principal

B. agent

Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed​ property, with an express agreement that the agent will not disclose the existence of the agency to a​ third-party seller. If Jackie​ Knox, who owns property in​ Chicago, agrees to sell the needed land and the agent signs his name​ "Saul Arnold,"​ _____. A. only Saul is liable on the contract B. both Saul and Disney are liable on the contract C. neither Saul nor Disney is liable on the contract D. only Jackie Knox is liable on the contract E. only Disney is liable on the contract

B. both Saul and Disney are liable on the contract

A​ _____ judgment permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan. A. preliminary B. deficiency C. proffer of judgment D. summary E. declaratory

B. deficiency

An apparent agency is also known as an agency by​ _____. A. first refusal B. estoppel C. last resort D. rebuttal E. ratification

B. estoppel

Upon the filing of a voluntary or an involuntary​ petition, all EXCEPT which of the following creditor actions are​stayed? A. ​non-judicial collection​ efforts, such as​ self-help activities B. filing a proof of claim C. enforcing judgments obtained against the debtor D. instituting or maintaining legal actions to collect prepetition debts E. ​obtaining, perfecting, or enforcing liens against the property of the debtor

B. filing a proof of claim

With a​ _____ power of​ attorney, a principal confers broad powers on the agent to act in any matters on the​principal's behalf. A. special B. general C. conditional D. restricted E. reserved

B. general

Chapter 7 bankruptcy is also called​ _____ bankruptcy. A. ​debtor-in-possession B. liquidation C. reaffirmation D. rescheduling E. ​non-liquidation

B. liquidation

Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed property. Disney tell Saul that the maximum it will pay for a​ 1-acre lot is​ $1 million. If Jackie​ Knox, who owns property in​ Chicago, agrees to sell the needed land for​ $1.5 million and the agent signs his name​ "Saul Arnold, agent for Walt​ Disney", _____. A. only Disney is liable on the contract B. only Disney is liable on the contract if Disney ratified the contract C. only Jackie Knox is liable on the contract D. both Saul and Disney are liable on the contract E. neither Saul nor Disney is liable on the contract

B. only Disney is liable on the contract if Disney ratified the contract

Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed property. Disney tell Saul that the maximum it will pay for a​ 1-acre lot is​ $1 million. If Jackie​ Knox, who owns property in​ Chicago, agrees to sell the needed land for​ $1.5 million and the agent signs his name​ "Saul Arnold, agent for Walt​ Disney",_____. A. neither Saul nor Disney is liable on the contract B. only Saul is liable on the contract C. only Disney is liable on the contract D. both Saul and Disney are liable on the contract E. only Jackie Knox is liable on the contract

B. only Saul is liable on the contract

Sarah purchases an automobile from a car dealership. She borrows part of the purchase price from a lender. The lender requires Sarah to give it a​ _____ in the automobile to secure the loan. This is a secured credit transaction with the automobile being​ _____ for the loan. If Sarah defaults and fails to make the required​ payments, the lender can​ _____. A. ​mortgage; collateral; repossess the automobile B. security​ interest; collateral; repossess the automobile C. ​mortgage; collateral; enter a deficiency judgment D. right of​ redemption; protection; repossess the automobile E. right of​ redemption; protection; foreclose on the property

B. security​ interest; collateral; repossess the automobile

Which of the following is NOT an example of tangible​ collateral? A. unborn young of animals B. stocks and bonds Your answer is correct. C. manufactured homes D. iron ore E. moving cranes

B. stocks and bonds

Maya Corporation borrows​ $100,000 from First Bank and gives the bank a security interest in both its current and​after-acquired inventory. If Maya Corporation defaults on its loan to First​ Bank, _______. A. the bank may only claim​ after-acquired inventory if it was acquired prior to the signing of the security agreement B. the bank can claim any available original inventory as well as enough​ after-acquired inventory to satisfy its secured claim C. the bank may only claim​ after-acquired inventory if it was acquired prior to the filing of a​ UCC-1 D. the bank may only claim the after acquired inventory E. the bank may only claim the original inventory

B. the bank can claim any available original inventory as well as enough​ after-acquired inventory to satisfy its secured claim

Whose actions create an apparent​ agency? A. the​ agent's B. the​ principal's C. the​ intermediary's D. the third party​ beneficiary's E. the incidental​ beneficiary's

B. the​ principal's

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 gives the bankruptcy court the power to void certain fraudulent transfers of a​ debtor's property made by the debtor within​ _____ prior to filing a petition for bankruptcy. A. thirty days B. two years C. sixty days D. six months E. one year

B. two years

Which of the following is NOT a critical factor in determining independent contractor​ status? A. whether the worker is engaged in a distinct occupation or an independently established business B. whether or not the agent has a degree C. whether the principal supplies the tools and equipment used in the work D. the amount of time that the agent works for the principal E. the length of time the agent has been employed by the principal

B. whether or not the agent has a degree

Which of the following is NOT a critical factor in determining independent contractor​ status? A. the length of time the agent has been employed by the principal B. whether the worker is paid by way of direct deposit or check C. the amount of time that the agent works for the principal D. whether the worker is engaged in a distinct occupation or an independently established business E. whether the principal supplies the tools and equipment used in the work

B. whether the worker is paid by way of direct deposit or check

Chapter​ _____ is a​ _____ form of bankruptcy that permits bankruptcy courts to supervise the​ debtor's plan for the payment of unpaid debts in installments over the plan period. A. ​13; liquidation B. ​13; rehabilitation C. ​7; rehabilitation D. ​7; liquidation E. ​11; liquidation

B. ​13; rehabilitation

Which of the following is NOT true about​ anti-deficiency statutes? A. ​Anti-deficiency statutes usually apply only to first purchase money mortgages. B. ​Anti-deficiency statutes prohibit deficiency judgments regarding certain types of​ mortgages, such as second mortgages on residential property. C. A first purchase money mortgage is a mortgage taken out to purchase a house. D. Second mortgages and other subsequent​ mortgages, even mortgages that refinance the first​ mortgage, usually are not protected by​ anti-deficiency statutes. E. ​Anti-deficiency statutes prohibit deficiency judgments regarding certain types of​ mortgages, such as loans for the original purchase of residential property.

B. ​Anti-deficiency statutes prohibit deficiency judgments regarding certain types of​ mortgages, such as second mortgages on residential property.

_____ of a security interest is a process that establishes the right of​ a(n) _____ creditor against other creditors who claim an interest in the collateral. A. ​Separation; secured B. ​Perfection; secured C. ​Detachment; unsecured D. ​Detachment; secured E. ​Perfection; unsecured

B. ​Perfection; secured

A(n) _____ statute prohibits deficiency judgments regarding certain types of​ mortgages, such as those on​ _____ property. A. ​reconveyance; urban B. ​anti-deficiency; residential C. ​deficiency; commercial D. ​deficiency; government-owned E. ​anti-deficiency; rural

B. ​anti-deficiency; residential

​A(n) _____ lien is a​ _____ lien given to workers on personal property to which the workers furnish services or materials in the ordinary course of business. A. ​statutory; common law B. ​artisan's; statutory C. ​artisan's; precedential D. ​artisan's; common law E. common​ law; statutory

B. ​artisan's; statutory

Which of the following is an INCORRECT statement regarding the bankruptcy​ trustee? A. A bankruptcy may be appointed in a Chapter 11 case on a showing of​ fraud, dishonesty,​ incompetence, or gross mismanagement of the affairs of the debtor by current management. B. Once​ appointed, a bankruptcy trustee becomes the legal representative of the​ debtor's estate. C. A bankruptcy trustee cannot be appointed in a Chapter 7 bankruptcy case. D. A bankruptcy trustee must be appointed in a Chapter 13 bankruptcy case. E. A bankruptcy trustee must be appointed in a Chapter 12 bankruptcy case.

C. A bankruptcy trustee cannot be appointed in a Chapter 7 bankruptcy case.

Which of the following is an INCORRECT statement regarding agent​ self-dealing? A. An agent who engages in undisclosed​ self-dealing with the principal has violated his or her duty of loyalty to the principal. B. If there has been undisclosed dealing by an​ agent, the principal can rescind the purchase and recover the money paid to the agent. C. Agents are generally allowed to​ self-deal with the​ principal, especially if the​ self-dealing is undisclosed. D. If there has been undisclosed dealing by an​ agent, the principal can ratify the purchase. E. ​Self-dealing is a common type of breach of the​ agent's duty of loyalty to the principal.

C. Agents are generally allowed to​ self-deal with the​ principal, especially if the​ self-dealing is undisclosed.

Which of the following is an INCORRECT statement regarding misuse of confidential information and the​ agent's duty of​ loyalty? A. If the agent violates the duty not to disclose or misuse confidential​ information, the principal can obtain an injunction ordering a third party to return the confidential information and to not use such information. B. An agent is under a legal duty not to disclose or misuse confidential information after the course of the agency. C. Agents are prohibited from using general​ information, knowledge, or experience acquired during the course of an agency in later employment. D. An agent is under a legal duty not to disclose or misuse confidential information during the course of the agency. E. If the agent violates the duty not to disclose or misuse confidential​ information, the principal can recover​damages, lost​ profits, and any remuneration the agent received from another party to obtain the information.

C. Agents are prohibited from using general​ information, knowledge, or experience acquired during the course of an agency in later employment.

Which of the following is an INCORRECT statement regarding usurping an opportunity and the​ agent's duty of​loyalty? A. If the agent appropriates an opportunity that belongs to the principal for​ him- or herself without the​principal's rejection of it after due​ consideration, the principal can recover the opportunity from the agent. B. An agent cannot appropriate an opportunity that belongs to the principal for​ him- or herself unless the principal rejects it after due consideration. C. An agent can personally usurp an opportunity that belongs to the principal. D. Usurping an opportunity is a common type of breach of the​ agent's duty of loyalty to the principal. E. A​ third-party offer to an agent must be conveyed to the principal.

C. An agent can personally usurp an opportunity that belongs to the principal.

Which of the following is an INCORRECT statement regarding independent​ contractors? A. Certified public accountants commonly act as independent contractors. B. If a client authorizes an attorney to settle a case within a certain dollar amount and the attorney does​ so, the settlement agreement is binding. C. As a general​ rule, employees are independent contractors. D. A principal can authorize an independent contractor to enter into contracts. E. Doctors commonly act as independent contracts.

C. As a general​ rule, employees are independent contractors.

Which of the following is NOT true about a Chapter 13​ bankruptcy? A. Chapter 13 permits a debtor to propose a plan to pay all or a portion of the debts owed in installments over a specified period of time. B. The bankruptcy court supervises the​ debtor's plan for the payment in a Chapter 13 bankruptcy case. C. Chapter 13 is only available to​ corporations, partnerships, and LLCs. D. Chapter 13 petitions are usually filed by individual debtors who do not qualify for Chapter 7 liquidation bankruptcy and by homeowners who want to protect nonexempt equity in their residence. E. Chapter 13 enables debtors to catch up on secured credit​ loans, such as home​ mortgages, and avoid repossession and foreclosure.

C. Chapter 13 is only available to​ corporations, partnerships, and LLCs.

Which of the following is an INCORRECT statement regarding a fully disclosed​ agency? A. A fully disclosed principal is liable on a contract with the third party. B. In a fully disclosed​ agency, the agent is not liable on the contract with the third party. C. In a fully disclosed​ agency, the contract is between the agent and the third party. D. In a fully disclosed​ agency, the​ agent's signature must clearly indicate that he or she is acting as an agent for a specifically identified principal. E. In a fully disclosed​ agency, the third party typically relied on the​ principal's credit and reputation when the contract was made.

C. In a fully disclosed​ agency, the contract is between the agent and the third party.

Qaadir hires​ Zaafir, a lawyer and an independent​ contractor, to represent him in a court case. While driving to the courthouse to represent Qaadir at​ trial, Zaafir negligently causes an automobile accident in which Maali is severely injured. Who is​ liable? A. ​Qaadir, because Zaafir is his independent contractor B. both Zaafir and Qaadir C. Zaafir​ only, because he is an independent contractor D. Qaadir​ only, because Zaafir is his agent acting on his behalf E. no one

C. Zaafir​ only, because he is an independent contractor

If two or more secured parties claim an interest in the same collateral but neither has a perfected​ claim, the first to​_____ has priority. A. litigate B. detach C. attach D. mediate E. arbitrate

C. attach

Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed property. If Jackie​ Knox, who owns property in​ Chicago, agrees to sell the needed land and the agent signs his name​ "Saul Arnold,​ agent," _____. A. only Saul is liable on the contract B. only Jackie Knox is liable on the contract C. both Saul and Disney are liable on the contract D. neither Saul nor Disney is liable on the contract E. only Disney is liable on the contract

C. both Saul and Disney are liable on the contract

Unsecured credit does not require any​ _____ to protect the payment of the debt. A. contract B. moral obligation C. collateral D. consideration E. promise

C. collateral

Under the​ _____ rule, a principal is generally​ _____ for injuries caused by its agents and employees while they are on their way to or from work. A. ​worker's compensation; liable B. coming and​ going; liable C. coming and​ going; not liable D. tort​ reform; liable E. frolic and​ detour; liable

C. coming and​ going; not liable

Notice that an agency has terminated that has been placed in the newspaper is an example of​ ___________. A. direct notice B. an ineffective termination C. constructive notice D. termination due to unusual circumstances E. termination by impossibility of performance

C. constructive notice

The doctrine of​ _____ rests on the principle that if someone expects to derive certain benefits from acting through​others, that person should also bear the liability for injuries caused to third persons by the negligent conduct of an agent who is acting within his or her scope of employment. A. absolute liability B. strict liability C. negligence D. contributory negligence E. assumption of the risk

C. negligence

If a debtor qualifies for a Chapter 7​ bankruptcy, the​ _________ property of the bankruptcy estate must be distributed to the​ debtor's secured and unsecured creditors pursuant to statutory priority established by the Bankruptcy code. A. executory B. voidable C. nonexempt D. executed E. exempt

C. nonexempt

Walt Disney Company wants to open a new theme park in Chicago but first needs to acquire land for the park. Disney employs Saul Arnold as an agent to work on its behalf to acquire the needed property. If Jackie​ Knox, who owns property in​ Chicago, agrees to sell the needed land and the agent signs his name​ "Saul Arnold, agent for Walt​Disney," _____. A. both Saul and Disney are liable on the contract B. only Saul is liable on the contract C. only Disney is liable on the contract D. neither Saul nor Disney is liable on the contract E. only Jackie Knox is liable on the contract

C. only Disney is liable on the contract

An agency can be legally terminated in all EXCEPT which of the following​ ways? A. if a stated time has elapsed B. the occurrence of a stated event C. ratification of the contract by the principal D. if a specific purpose is achieved E. the mutual assent of the parties

C. ratification of the contract by the principal

With​ a(n) _____ power of​ attorney, a principal confers powers on an agent to act in specified matters on the​principal's behalf. A. ratified B. broad C. special D. unconditional E. general

C. special

Which of the following is NOT a duty a principal owes to an​ agent? A. reimbursement B. indemnification C. subrogation D. compensation E. cooperation

C. subrogation

Which of the following circumstances can lead to termination of an agency by impossibility of​ performance? A. after the contract is​ formed, it becomes more difficult for the principal to perform his or her​ agency-related duties B. after the contract is​ formed, it becomes more difficult for the agent to perform his or her​ agency-related duties C. the loss of a required qualification D. after the contract is​ formed, it becomes more expensive for the principal to perform his or her​agency-related duties E. after the contract is​ formed, it becomes more expensive for the agent to perform his or her​ agency-related duties

C. the loss of a required qualification

Which of the following circumstances can lead to termination of an agency by impossibility of​ performance? A. after the contract is​ formed, it becomes more expensive for the agent to perform his or her​ agency-related duties B. after the contract is​ formed, it becomes more difficult for the principal to perform his or her​ agency-related duties C. the loss or destruction of the subject matter of the agency D. after the contract is​ formed, it becomes more difficult for the agent to perform his or her​ agency-related duties E. after the contract is​ formed, it becomes more expensive for the principal to perform his or her​agency-related duties

C. the loss or destruction of the subject matter of the agency

Chapter​ _____ is a bankruptcy method that allows the​ _____ of the​ debtor's financial affairs under the supervision of the bankruptcy court. A. ​7; restructuring B. ​7; reorganization C. ​11; reorganization D. ​11; liquidation E. ​13; liquidation

C. ​11; reorganization

Principals often employ outsiders—that ​is, persons and businesses that are not ​_____—to perform certain tasks on their behalf. These persons and businesses are called​ _____. A. independent​ contractors; employees B. independent​ contractors; incidental beneficiaries C. ​employees; independent contractors D. third party​ beneficiaries; incidental beneficiaries E. incidental​ beneficiaries; third party beneficiaries

C. ​employees; independent contractors

Jordan is a lawyer who has her own law firm and specializes in real estate law.​ Dylan, a real estate​ developer, hires Jordan to represent him in the purchase of land. Dylan is the​ _______, and Jordan is the​ ________. A. ​principal; employee B. ​agent; independent contractor C. ​principal; independent contractor D. ​principal; subagent E. ​agent; employee

C. ​principal; independent contractor

A​ _____ statement is a document filed by a secured party that ends a secured interest because​ _____. A. ​reconveyance; of commercial impracticability B. ​reconveyance; the debt has been paid C. ​termination; the debt has been paid Your answer is correct. D. ​termination; of frustration of purpose E. ​termination; of commercial impracticability

C. ​termination; the debt has been paid

A debtor must receive prepetition credit counseling within​ _____ days prior to filing his or her petition for bankruptcy. A. 30 B. 90 C. 60 D. 180 E. 120

D. 180

Which of the following is an INCORRECT statement regarding recording​ statutes? A. The​ non-recordation of a mortgage does not affect the legality of the instrument between the mortgagor and the mortgagee. B. The filing of a mortgage in the county​ recorder's office in the county in which the real property is located is public record and alerts the world that the mortgage has been recorded against the real property. C. The filing of a deed of trust in the county​ recorder's office in the county in which the real property is located is public record and alerts the world that the deed of trust has been recorded against the real property. D. As a general​ rule, it is not necessary to record a mortgage or deed of trust in the county​ recorder's office. E. The mortgagor is obligated to pay the amount of the mortgage according to the terms of the​ mortgage, even if the document is not recorded.

D. As a general​ rule, it is not necessary to record a mortgage or deed of trust in the county​ recorder's office.

Which of the following is not a special chapter of the Bankruptcy Code which provides different types of bankruptcy under which individual and business debtors may be granted​ remedy? A. Chapter 11 B. Chapter 13 C. Chapter 12 D. Chapter 5 E. Chapter 7

D. Chapter 5

Because lenders are sometimes reluctant to lend large sums of money simply on the​ borrower's promise to​ repay, many lenders take a security interest in the property purchased or some other property of the debtor.​ _____ secures payment of a secured loan. A. Income B. An ethical obligation C. A contract obligation D. Collateral E. A promise

D. Collateral

_____ property is property that may be retained by the debtor pursuant to federal or state law that does not become part of the bankruptcy estate. A. Void B. Executory C. Executed D. Exempt E. Voidable

D. Exempt

_____ agency is the most common form of agency. A. Symbolic B. Conditional C. Implied D. Express E. Constructive

D. Express

​_____ is a legal procedure by which a secured creditor causes the judicial sale of the secured real estate to pay a defaulted loan. A. Execution B. Remuneration C. Reclamation D. Foreclosure E. Reconveyance

D. Foreclosure

The party who employs an independent contractor is called​ a(n) _____. A. employer B. trustor C. assignee D. agent E. principal

E. principal

Which of the following is NOT true about a Chapter 7​ bankruptcy? A. Approximately​ 475,000 Chapter 7 bankruptcies are filed each year. B. In a Chapter 7 bankruptcy the debtor is permitted to keep a substantial portion of his or her assets​ (exempt assets). C. In a Chapter 7 bankruptcy the​ debtor's future​ income, even if the debtor becomes​ rich, cannot be reached to pay the discharged debt. D. In a Chapter 7 bankruptcy the​ debtor's future income can be reached to pay the discharged debt. E. In a Chapter 7 bankruptcy the​ debtor's non-exempt property is sold for​ cash, and the cash is distributed to the​ creditors; any of the​ debtor's unpaid debts are discharged.

D. In a Chapter 7 bankruptcy the​ debtor's future income can be reached to pay the discharged debt.

Which of the following is an INCORRECT statement regarding power of​ sale? A. The procedure for the sale is provided in the mortgage or deed of trust itself. B. Power of sale must be expressly conferred in the mortgage or deed of trust. C. The sale must be by auction for the highest price​ obtainable, and any surplus must be paid to the mortgagor. D. Only a few states permit foreclosure by power of​ sale, as such a sale is per se unconscionable against the mortgagor and deprives him or her of necessary shelter. E. No court action is necessary to exercise a power of sale.

D. Only a few states permit foreclosure by power of​ sale, as such a sale is per se unconscionable against the mortgagor and deprives him or her of necessary shelter.

Which of the following is an INCORRECT statement regarding a​ "frolic and​ detour?" A. Negligence actions stemming from frolic and detour are examined on a​ case-by-case basis. B. Agents are always personally liable for their tortious conduct during a frolic and detour. C. A frolic and detour is a situation in which an agent does something during the course of his or her employment to further his or her own interest rather than the​ principal's. D. Principals are generally liable if an​ agent's frolic and detour is substantial. E. An agent might choose to run a personal errand while on assignment for the principal. This is commonly referred to as a frolic and detour.

D. Principals are generally liable if an​ agent's frolic and detour is substantial.

​_____ of collateral is a secured​ creditor's repossession of collateral on a​ debtor's default and proposal to retain the collateral in satisfaction of the​ debtor's obligation. A. Rejection B. Revocation C. Remuneration D. Retention E. Rescission

D. Retention

An owner of a vacant lot enters into an agency agreement with a real estate agent to sell the lot for​ $1 million based on the​ agent's market analysis. After signing the​ agreement, the agent learns that oil has been discovered on the​property, a discovery that makes the land worth​ $5 million. Which of the following is​ true? A. The agency does not terminate because it would be a wrongful termination. B. The agency terminates because of impossibility of performance. C. The agency terminates by operation of law. D. The agency may be terminated because of this change in circumstances. E. The owner of the lot must sell the land for​ $1 million.

D. The agency may be terminated because of this change in circumstances.

Which of the following is an INCORRECT statement regarding secured​ credit? A. A security interest may be taken in intangible property. B. To minimize the risk associated with extending unsecured​ credit, a creditor may require collateral. C. A security interest may be taken in personal property. D. Unsecured credit requires collateral for a loan. E. A security interest may be taken in real property.

D. Unsecured credit requires collateral for a loan.

Which of the following is an INCORRECT statement regarding express​ agencies? A. In most​ states, a real estate​ broker's contract to sell real estate must be in writing. B. Express agency is the most common form of agency. C. Express agency occurs when a principal and an agent expressly agree to enter into an agency agreement with each other. D. Without​ exception, express agency contracts must be in writing to be enforceable. E. In an express​ agency, the agent has the authority to contract or otherwise act on the​ principal's behalf, as expressly stated in the agency agreement.

D. Without​ exception, express agency contracts must be in writing to be enforceable.

A​ principal-_____ relationship is formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf. A. bailee B. third party beneficiary C. assignee D. agent E. incidental beneficiary

D. agent

Which of the following is NOT an example of tangible personal​ property? A. equipment B. inventory C. accessions D. chattel paper E. consumer goods

D. chattel paper

An agent works as a salesperson for a principal who owns an automotive parts business. The​ agent's job is to sell the​ principal's automotive parts to auto repair shops and other purchasers. While doing​ so, the agent also works as a salesperson for a competing seller of automotive parts. This is a violation of the duty of loyalty known as​___________. A. usurping an opportunity B. ​self-dealing C. dual agency D. competing with the principal E. misuse of confidential information

D. competing with the principal

Olivia signs a document giving her sister the authority to act on her behalf while she undergoes surgery. This is known as​ a(n) _____. A. special power of attorney B. general power of attorney C. agency by ratification D. durable power of attorney E. implied agency

D. durable power of attorney

A general medical practitioner in a rural area would be held to the standard of a reasonable​ ________. A brain surgeon would be held to the standard of a reasonable​ ________. A. general practitioner in rural​ areas; brain surgeon in rural areas B. general practitioner in rural​ areas; person C. general​ practitioner; brain surgeon D. general practitioner in rural​ areas; brain surgeon E. ​person; general practitioner

D. general practitioner in rural​ areas; brain surgeon

All things that are nonphysical property when a security attaches are called​ _____ property. A. tangible personal B. tangible personal C. intangible real D. intangible personal E. tangible intellectual

D. intangible personal

An agency is terminated by operation of law in which of the following​ circumstances? A. if a stated time has elapsed B. the occurrence of a stated event C. if a specified purpose is achieved D. the mutual assent of the parties E. the bankruptcy of the principal

E. the bankruptcy of the principal

Tamara sues Jerry for fraud. Tamara lost a large sum of money to Jerry when she invested in what she alleges was a fraudulent investment scheme. If Tamara is afraid that Jerry will dispose of property prior to the resolution of the lawsuit she has​ filed, in order to attempt to avoid paying her the funds he owes to​ her, she​ _______. A. may file for a writ of garnishment B. may file for a writ of execution C. must enter into a surety arrangement D. may file for a writ of attachment E. must enter into a guaranty arrangement

D. may file for a writ of attachment

Assume that a debtor owns a principal residence worth​ $100,000 that is subject to a​ $70,000 mortgage and the debtor therefore owns​ $30,000 of equity in the property. The debtor files a petition for Chapter 7 liquidation bankruptcy. The trustee may sell the​ home, _________,​ (applying the federal​ exemption), and use the remaining proceeds of​ ___________ for distribution to the​ debtor's creditors. A. pay off the unsecured​ creditors, pay the debtor​ $23,675; $6,325 B. pay off the​ mortgage, pay the debtor​ $0; $30,000 C. pay off the​ mortgage, pay the debtor​ $23,675; $6,325 D. pay the debtor​ $25,150, pay off the​ mortgage; $6,850 E. pay off the​ mortgage, pay the debtor​ $6,325; $23,675

D. pay the debtor​ $25,150, pay off the​ mortgage; $6,850

A party who employs another person to act on his or her behalf is called​ a(n) _____. A. assignee B. agent C. independent contractor D. principal E. delegatee

D. principal

A​ _____ agreement is an agreement entered into by a debtor with a creditor prior to discharge whereby the debtor agrees to pay the creditor a debt that would otherwise be discharged in bankruptcy. A. restitution B. revocation C. reclamation D. reaffirmation E. rehabilitation

D. reaffirmation

Which of the following is NOT a common type of breach of the​ agent's duty of loyalty to the​ principal? A. misuse of confidential information B. usurping an opportunity C. ​self-dealing D. single agency with the principal E. competing with the principal

D. single agency with the principal

Olivia signs a document giving her sister the authority to sign any documents necessary to list her house for sale while she is on vacation. This is known as​ a(n) _____. A. agency by ratification B. durable power of attorney C. implied agency D. special power of attorney E. general power of attorney

D. special power of attorney

Which of the following is NOT required to be disclosed in a written solicitation under the Fair Credit and Charge Card Disclosure​ Act? A. any annual membership fee B. any transaction charge for use of the card for purchases C. the debt to income ratio required D. the APR E. any minimum or fixed finance charge

D. the APR

An agency is terminated by operation of law in which of the following​ circumstances? A. if a specified purpose is achieved B. the occurrence of a stated event C. the mutual assent of the parties D. the death of the principal E. if a stated time has lapsed

D. the death of the principal

Which of the following is NOT a federal exemption recognized by the Bankruptcy​ Code? A. up to​ $25,150 in equity in a burial plot B. any unmatured life insurance policy owned by the debtor C. up to​ $4,000 in value in one motor vehicle D. up to​ $150,000 in equity in property used as a primary residence E. personal injury awards up to​ $25,150

D. up to​ $150,000 in equity in property used as a primary residence

Which of the following is an INCORRECT statement regarding the creation of an agency​ relationship? A. ​Generally, insane persons cannot appoint agents. B. An agency can be created only to accomplish a lawful purpose. C. Any person who has the capacity to contract can appoint an agent to act on his or her behalf. D. ​Generally, minors can appoint agents. E. Agency contracts that are created for illegal purposes or are against public policy are void and unenforceable.

D. ​Generally, minors can appoint agents.

Article​ _____, Section​ _____, Clause 4 of the U.S. Constitution​ states, "The Congress shall have the power...to establish...uniform laws on the subject of bankruptcies throughout the United​ States." A. ​II; 8 B. ​I; 5 C. ​III; 8 D. ​I; 8 E. ​II; 5

D. ​I; 8

The​ _____ Reform and​ Anti-_____ Lending Act is designed to eliminate many abusive loan practices and mandates new duties and disclosure requirements for mortgage lenders. A. ​Tort; Mortgage B. ​Tort; Predatory C. ​Mortgage; Tort D. ​Mortgage; Predatory E. ​Consumer; Commercial

D. ​Mortgage; Predatory

Sometimes principals request that agents run errands or conduct other acts on their behalf while the agent or employee is on personal business. In this​ case, the agent is on a​ _____, and most jurisdictions hold​ _____ liable if the agent injures someone while on such a mission. A. unilateral​ mission; neither the principal nor the agent B. ​dual-purpose mission; the​ principal, but not the​ agent, C. unilateral​ mission; both the principal and the agent D. ​dual-purpose mission; both the principal and the agent E. ​dual-purpose mission; the​ agent, but not the​ principal,

D. ​dual-purpose mission; both the principal and the agent

Perfection by possession of collateral is a rule stating that if​ a(n) _____ creditor has​ _____ possession of the​collateral, no financing statement has to be filed. A. ​unsecured; symbolic B. ​secured; future C. ​unsecured; constructive D. ​secured; physical Your answer is correct. E. ​unsecured; physical

D. ​secured; physical

In a​ _____ arrangement, a third party promises to be primarily liable with the borrower for the payment of the​borrower's debt, while in a​ _____ arrangement, a third party promises to be secondarily liable for the payment of​another's debt. A. ​guaranty; surety B. deed of​ trust; mortgage C. ​mortgage; deed of trust D. ​surety; guaranty E. ​subrogation; cosigner

D. ​surety; guaranty

Which of the following is NOT true about an​ agent's duties? A. Unless otherwise​ agreed, an agent owes a duty to maintain an accurate accounting of all transactions undertaken on the​ principal's behalf. B. The duty to account​ (sometimes called the duty of​ accountability) includes keeping records of all property and money received and expended during the course of the agency. C. A principal has a right to demand an accounting from the agent at any time. D. The agent is liable to the principal for any injuries resulting from a breach of its duty to notify. E. An agent may keep the​ principal's money in the​ agent's personal bank account for safekeeping.

E. An agent may keep the​ principal's money in the​ agent's personal bank account for safekeeping.

Which of the following is NOT true about Article 9 of the​ UCC? A. Article 9 does not apply to transactions involving real estate​ mortgages, landlord's​ liens, artisan's or​mechanic's liens, liens on​ wages, judicial​ liens, and the like. Your answer is not correct. B. Most states have enacted Revised Article 9 as the secured transactions statute within their states. C. In​ 2001, the National Conference of Commissioners on Uniform State Laws and the American Law Institute issued Revised Article 9​ (Secured Transactions) of the UCC. D. Article 9​ (Secured Transactions) of the Uniform Commercial Code​ (UCC) governs secured transactions in which personal property is used as collateral for a loan or the extension of credit. E. Article 9 applies to transactions involving real estate​ mortgages, landlord's​ liens, artisan's or​ mechanic's liens, liens on​ wages, judicial​ liens, and the like.

E. Article 9 applies to transactions involving real estate​ mortgages, landlord's​ liens, artisan's or​ mechanic's liens, liens on​ wages, judicial​ liens, and the like.

Marty Levine sees a house for sale and thinks his friend Linda Maxwell would want to buy it. Marty enters into a contract to purchase the house from the seller and signs the contract​ "Marty Levine, agent for Linda​ Maxwell." Which of the following is NOT​ true? A. If Linda agrees to purchase the​ house, there is an agency by ratification. B. If Linda had signed an agency agreement with​ Marty, Linda Maxwell would be obligated to purchase the house. C. Because Marty is not Linda​ Maxwell's agent, Linda is not bound to the contract. D. If Linda does not accept the​ contract, she is not bound by it. E. Because Marty is now Linda​ Maxwell's agent, Linda is bound to the contract.

E. Because Marty is now Linda​ Maxwell's agent, Linda is bound to the contract.

Which of the following is NOT true about a Chapter 11​ bankruptcy? A. Chapter 11 is available to​ partnerships, corporations, limited liability​ companies, and other business entities. B. Approximately​ 7,000 Chapter 11 bankruptcies are filed each year. C. The goal of Chapter 11 is to reorganize the debtor with a new capital structure so that the debtor emerges from bankruptcy as a viable concern. D. Chapter​ 11, which is referred to as reorganization​ bankruptcy, is often in the best interests of debtors and creditors. E. Chapter 11 is only available to wealthy individuals.

E. Chapter 11 is only available to wealthy individuals.

Which of the following is an INCORRECT statement regarding bankruptcy​ exemptions? A. A state that enacts its own bankruptcy exemptions may require debtors to follow state law regarding those exemptions. B. The exemptions available under state law are often more liberal than those provided by federal law. C. A state that enacts its own bankruptcy exemptions may give debtors the option of choosing between federal and state exemptions. D. Exempt property is property of the debtor that he or she can keep and that does not become part of the bankruptcy estate. E. The Bankruptcy Code does not permit states to enact their own bankruptcy exemptions.

E. The Bankruptcy Code does not permit states to enact their own bankruptcy exemptions.

Which of the following is NOT true about disposing of the​ collateral? A. The​ method, manner,​ time, place, and terms of the disposition must be commercially reasonable. B. Disposition of collateral may be by public or private proceeding. C. In the event of a​ debtor's default, a secured party may​ sell, lease, or otherwise dispose of the collateral in its current condition or following any commercially reasonable preparation or processing. D. The secured party must notify the debtor in writing about the time and place of any public or private sale or any other intended disposition of the collateral unless the debtor has signed a statement renouncing or modifying the right to receive such notice. E. The debtor is not entitled to receive any surplus that remains after the sale or other disposition.

E. The debtor is not entitled to receive any surplus that remains after the sale or other disposition

____ credit does not require any security​ (collateral) to protect the payment of the debt. A. Secured B. Primary C. Secondary D. Commercial E. Unsecured

E. Unsecured

Which of the following is NOT an example of intangible personal​ property? A. negotiable instruments B. chattel paper C. accounts D. deposit accounts E. accessions

E. accessions

When can a debt collector contact a​ debtor? A. at​ church, mosque, or synagogue B. when the debtor is represented by an attorney C. after​ 9:00 PM D. prior to​ 8:00 AM E. between​ 8:00 AM and​ 9:00 PM

E. between​ 8:00 AM and​ 9:00 PM

Siri, who is driving her​ automobile, is injured when another driver negligently causes an automobile accident. Siri hires a lawyer to represent her on a 35 percent​ contingency-fee basis. If the lawyer wins the case for Siri or settles the case with​ Siri's approval, he will earn 35 percent of whatever is collected from the defendant. If the lawyer does not win or settle the​ lawsuit, he gets paid nothing. The agent can recover this amount from the principal because of the duty to​ _______. A. cooperate B. indemnify C. perform D. reimburse E. compensate

E. compensate

Section​ 1(1) of the Restatement​ (Second) of Agency defines agency as​ a(n) _____ relationship ​"which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control.​" A. fallacious B. employment C. entreated D. fictitious E. fiduciary

E. fiduciary

​Irene, a college​ student, wants to purchase a new BMW automobile. She goes to Auto Dealer and finds exactly the car she​ wants, and she wants to finance the car. Auto Dealer will not sell the car to Irene on credit based on​ Irene's own credit standing. Auto Dealer requires Irene to find a​ co-signer for the purchase and credit contract. Irene asks her mother to agree to pay the debt if she defaults. If​ Irene's mother signs such a​ document, this is known as a​________. Irene's mother​ ________ on the loan. A. surety​ arrangement; is primarily liable B. writ of​ execution; is primarily liable with Irene C. writ of​ attachment; is not liable D. writ of​ garnishment; is secondarily liable with Irene E. guaranty​ arrangement; is secondarily liable

E. guaranty​ arrangement; is secondarily liable

An agency terminates by​ _____ of performance because a situation arises that makes the fulfillment of the agency impossible. A. rescission B. improbability C. rejection D. revocation E. impossibility

E. impossibility

If the debtor is​ _____, he or she has little or no property or income that can be garnished to pay the debt. A. secured B. a corporation C. unsecured D. a sole proprietorship E. judgment proof

E. judgment proof

​Isaias, a college​ student, wants to purchase a new​ computer, printer, and other electronic equipment on credit from Electronics​ Retail, Inc. Electronics will not sell the computer and other equipment to Isaias unless he can get someone to guarantee the payment. Isaias asks his​ roommate, Edward, to guarantee the payment. Edward​ agrees, and he is placed on the credit agreement as a guarantor. If Isaias fails to make the necessary​ payment, Electronics​_____. A. may file a joint action against both Isaias and Edward B. may only recover against Edward C. may immediately file an action against Edward D. may only recover against Isaias E. must first attempt unsuccessfully to recover the payments from Isaias before taking legal action against Edward to recover payment

E. must first attempt unsuccessfully to recover the payments from Isaias before taking legal action against Edward to recover payment

The bankruptcy estate is created​ _____. A. with the execution of a reaffirmation agreement B. at the second meeting of creditors C. at the first meeting of creditors D. with the execution of a reclamation agreement E. on the commencement of a bankruptcy case

E. on the commencement of a bankruptcy case

In​ a(n) _____​ agency, a contracting third party knows that the agent is acting for a principal but does not know the identity of the principal. A. statutory B. undisclosed C. fully disclosed D. common law E. partially disclosed

E. partially disclosed

If two or more secured parties claim an interest in the same collateral but only one has perfected his or her security​interest, the​ _____ interest has priority. A. symbolic B. equitable C. unperfected D. constructive E. perfected

E. perfected

An agent works for a principal that is in the business of real estate development. The principal is looking for vacant land to purchase to develop. A third party who owns and wants to sell his vacant land tells an agent of the principal of the availability of the land. The​ agent, without informing the​ principal, purchases the land for personal use. This is a violation of the duty of loyalty known as​ _________. A. dual agency B. competing with the principal C. misuse of confidential information D. ​self-dealing E. usurping an opportunity

E. usurping an opportunity

_____ of collateral is a secured​ creditor's repossession of collateral on a​ debtor's default and​ selling, leasing, or otherwise disposing of it in a​ _____ manner. A. ​Defalcation; commercially reasonable B. ​Deposition; commercially reasonable C. ​Disposition; personally convenient D. ​Defalcation; personally convenient E. ​Disposition; commercially reasonable

E. ​Disposition; commercially reasonable

Sometimes principals request that agents run errands or conduct other acts on their behalf while the agent or employee is on personal business. In this​ case, the agent is on a​ _____, and most jurisdictions hold​ _____ liable if the agent injures someone while on such a mission. A. unilateral​ mission; both the principal and the agent B. unilateral​ mission; neither the principal nor the agent C. ​dual-purpose mission; the​ principal, but not the​ agent, D. ​dual-purpose mission; the​ agent, but not the​ principal, E. ​dual-purpose mission; both the principal and the agent

E. ​dual-purpose mission; both the principal and the agent

A writ of​ _________ is a court order directing a sheriff or other government officials to​ _________ that is in the​debtor's possession and authorizes a judicial sale of that property. A. ​garnishment; seize the​ debtor's property B. ​execution; post a bond with the court C. ​attachment; post a bond with the court D. ​attachment; seize the​ debtor's property E. ​execution; seize the​ debtor's property

E. ​execution; seize the​ debtor's property

Under the​ _____ test, if the​ agent's motivation for committing an intentional tort is to promote the​ _____ business, the principal is liable for any injury caused by the tort. A. ​captivation; principal's Your answer is not correct. B. ​motivation; agent's C. ​motivation; third​ party's D. ​captivation; agent's E. ​motivation; principal's

E. ​motivation; principal's

The right of​ _____ allows the mortgagor to redeem real property after​ _____ and before​ _____. A. ​ademption; foreclosure; default B. ​redemption; foreclosure; default C. ​reconveyance; default; foreclosure D. ​reconveyance; default; foreclosure E. ​redemption; default; foreclosure

E. ​redemption; default; foreclosure

A financing statement is a document filed by​ a(n) _____ creditor with the appropriate government office that constructively notifies the world of his or her security interest in​ _____ property. A. ​unsecured; personal B. ​non-commercial; real C. ​unsecured; real D. ​secured; real E. ​secured; personal

E. ​secured; personal

If a real estate agent who is employed to purchase real estate for a principal secretly sells his or her own property to the​ principal, this is a violation of the duty of loyalty known as​ __________. A. usurping an opportunity B. competing with the principal C. misuse of confidential information D. dual agency E. ​self-dealing

E. ​self-dealing

A farmer purchases equipment from a manufacturer. The farmer obtains a loan to purchase the equipment from a​bank, which obtains a security interest in the equipment. The equipment manufacturer is paid for the equipment out of the proceeds of the loan. This is a​ __________ secured transaction. The manufacturer is the​ seller, the farmer is the​ __________, and the bank is the​ ___________ creditor. A. ​three-party; seller-lender;​ buyer-debtor-secured B. ​two-party; buyer-debtor;​ seller-lender-secured C. ​two-party; seller-lender;​ buyer-debtor-secured D. ​two-party; buyer-debtor;​ seller-lender-unsecured E. ​three-party; buyer-debtor;​ lender-secured

E. ​three-party; buyer-debtor;​ lender-secured

A​ _____ transaction occurs when a seller sells goods to a buyer on credit and retains a security interest in the goods. A. ​three-party unsecured B. ​multi-party; unsecured C. ​two-party unsecured D. ​three-party secured E. ​two-party secured

E. ​two-party secured

A farmer purchases equipment on credit from a farm equipment dealer. The dealer retains a security interest in the farm equipment that becomes collateral for the loan. This is a​ _________ secured transaction. The farmer is the​__________ and the farm equipment dealer is the​ _________ creditor. A. ​two-party; buyer-debtor;​ seller-lender-unsecured B. ​two-party; seller-lender;​ buyer-debtor-secured C. ​three-party; seller-lender;​ buyer-debtor-secured D. ​three-party; buyer-debtor;​ lender-secured E. ​two-party; buyer-debtor;​ seller-lender-secured

E. ​two-party; buyer-debtor;​ seller-lender-secured

Which of the following is NOT true regarding financing​ statements? A. Most states require financing statements covering farm​ equipment, farm​ products, accounts, and consumer goods to be filed with the county clerk​ [Revised UCC​ 9-501]. B. Financing statements are effective for 5 years from the date of filing​ [Revised UCC​ 9-515(a)]. C. A continuation statement may be filed up to 6 months prior to the expiration of a financing​ statement's 5-year term. D. They serve as constructive notice to the world that a creditor claims an interest in a property. E. Financing statements can only be reviewed by approved creditors.

Financing statements can only be reviewed by approved creditors.

​A(n) _____ judgment is a judgment of a court that permits​ a(n) _____ lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan. A. ​default; unsecured B. ​deficiency; secured Your answer is correct. C. ​executory; secured D. ​summary; non-commercial E. ​declaratory; commercial

​deficiency; secured

A​ _____ transaction occurs when a seller sells goods to a buyer who has obtained financing from a​ third-party lender who takes a security interest in the goods sold. A. ​two-party unsecured B. ​three-party unsecured C. ​two-party secured D. ​three-party secured Your answer is correct. E. ​two-party mortgage

​three-party secured