If Michael, ABC Electronics, and XYZ Credit Have a Dispute

question 6

Multiple Choice

If Michael, ABC Electronics, and XYZ Credit have a dispute regarding entitlement to the television, who is likely to win and why?

• A) ABC Electronics will prevail because, as a seller of consumer goods, it did not need a perfected security interest in order to prevail against other creditors.
• B) ABC Electronics will prevail because it had a perfected security interest.
• C) XYZ Credit will prevail because although ABC Electronics had a perfected security interest, it did not file a financing statement.
• D) XYZ Credit will prevail because a luxury good was involved and, although ABC Electronics had a perfected security interest, it did not file a financing statement as required within 10 days of the sale.
• E) XYZ Credit will prevail because it had a perfected security interest in a greater amount of goods than did ABC Electronics.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal.