To Create an Enforceable Security Interest, the Collateral Must Be

question 59

True/False

To create an enforceable security interest, the collateral must be in the possession of neither the debtor nor the secured party, but in escrow.

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Definitions:

Purchases Discount

A reduction in the invoice price of goods, granted by the seller to the buyer for early payment within a specified time frame.

Gross Method

An accounting method for recording inventory purchases without deducting discounts at the time of purchase.

Periodic Inventory System

An inventory system that, at the end of each accounting period, calculates the cost of the unsold goods on hand by taking the cost of each unit times the number of units of each product on hand.

Merchandise

Goods or products that a retailer buys to sell to consumers, especially in the context of physical goods stocked in a store.