Best Bank Lends $3,000 to Juan to Purchase a Car

question 57

Multiple Choice

Best Bank lends $3,000 to Juan to purchase a car and Juan signs a loan agreement granting Best Bank a lien on the car. This is an example of what type of lien?

• A) Statutory
• B) Consensual
• C) Judgment
• D) Approved
• E) Evaluated

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Definitions:

Depreciated

The reduction in value of an asset over time due to wear and tear, age, or obsolescence, commonly used in accounting to allocate the cost of an asset over its useful life.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.

Market Value

The ongoing value at which one can buy or sell a service or asset in the market.

Nonmonetary Assets

Assets that cannot be readily converted into cash, such as property, equipment, and patents.