The UCC Prohibits the Use of "Floating Liens" That Keep

question 230

True/False

The UCC prohibits the use of "floating liens" that keep carrying forward against a debtor when more supplies are added to an existing account.

---

Definitions:

Operating Expenses

The costs associated with running a company’s day-to-day operations, excluding the cost of goods sold, such as salaries, rent, and utilities.

Net Income

The amount of profit left after all expenses, taxes, and costs have been subtracted from total revenue.

Current Asset

Assets that are expected to be converted into cash, sold, or consumed within one year or the business's operating cycle, whichever is longer.

Perpetual Inventory System

An inventory management system that continuously updates the quantity and value of inventory on hand and sold.