[Favi's Furniture] Favi Took Out a Loan from First Bank

question 17

Multiple Choice

[Favi's Furniture] Favi took out a loan from First Bank and executed a security agreement which gave First Bank rights to any after-acquired property as collateral. A year later, Favi took out a loan with Second Bank and executed a security agreement with Second Bank using his new delivery truck as collateral. Favi eventually defaulted on both loans.
-If First Bank had properly perfected its security interest, which creditor's interest would take priority?

• A) First Bank, because in a dispute between a secured perfected creditor and a secured unperfected creditor, the secured perfected creditor takes priority.
• B) First Bank, because in a dispute between two secured and perfected creditors, the party who perfected first takes priority.
• C) First Bank, because in a dispute between two secured but unperfected creditors, the party who attached first takes priority.
• D) The two banks will have equal rights to the property.
• E) Second Bank, because "after-acquired property" is not specific enough to grant attachment right to First Bank, and, thus, the secured agreement of Second Bank takes priority.

Recognize the importance of joy and self-fulfillment beyond basic needs, aligning with humanist perspectives.

Grasp the concept of resilience and its impact on overcoming adverse experiences.

Comprehend Carl Rogers' views on self-concept development.

Understand the positive impacts of optimism on physical health and the immune system.

---

Definitions:

Incorrect Account

An accounting error where a transaction is recorded in the wrong account, potentially misleading financial statements.

Computerized Accounting Systems

Digital systems that automate and manage financial transactions and records, enhancing accuracy and efficiency in financial reporting.

Journalizing Errors

Mistakes made during the process of recording transactions in the accounting journal.

Record Keeping

The process of maintaining accurate and systematic records of an organization's financial transactions and other significant events.