A Security Interest in a Piece of Equipment Owned by a Business

question 60

Multiple Choice

A security interest in a piece of equipment owned by a business would most often be perfected:

• A) by filing
• B) by possession
• C) by an agreement to that effect between debtor and creditor
• D) automatically

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Definitions:

Credit Balance

The amount that appears on the right side of a ledger account, indicating that a liability has increased or an asset has decreased.

Debt Ratio

The debt ratio is a financial ratio that compares a company's total debt to its total assets, indicating the proportion of a company's funding that comes from debt.

Total Assets

Total assets refer to the sum of all current and non-current assets owned by a company, reflecting the total resources available for use.

Total Liabilities

Total liabilities refer to the sum of all financial obligations a company owes to outside parties, including loans, accounts payable, and mortgages.