Automatic Perfection Would Occur in Which Situation (Assuming a Written

question 44

Multiple Choice

Automatic perfection would occur in which situation (assuming a written security agreement) ?

• A)Mary buys a refrigerator for her apartment on credit.
• B)Carl buys a computer for his office on credit.
• C)Carl buys a computer for his office by borrowing the money for the purchase.
• D)Mary buys inventory for her home-based sewing business.

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Definitions:

Promissory Note

A financial instrument that represents a written promise by one party to pay a specified sum of money to another party, either on demand or at a predetermined future date.

Account Receivable

Funds that are yet to be received from customers to whom goods or services have been sold on credit.

Formal Credit Instrument

A legal document that represents an agreement to extend credit, specifying the terms under which credit is provided and must be repaid.

Maturity Date

The specified date on which the principal amount of a financial instrument is due to be paid in full.