The Code Provides

question 47

Multiple Choice

The Code provides:

• A)parties to a security agreement have a great deal of freedom in drafting their agreement.
• B)security agreements may not contain a provision for acceleration, at the secured party's option, of all payments upon default in any payment by the debtor.
• C)that if the secured party becomes insecure about the prospects of future payments, the only recourse is to require the debtor to name a surety for the remaining debt.
• D)a security agreement may describe the collateral as "all my personal property."

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Definitions:

Principle of Conservatism

An accounting guideline where revenue and assets are not overestimated while liabilities and expenses are not underestimated.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Normal Profit Margin

The average or expected profit margin that a business aims to achieve under normal operating conditions.

Allowance Method

An accounting technique used to account for expected credit losses on accounts receivable by anticipating uncollectible accounts.