Identify the Statement That Is True of Perfection by Attachment

question 32

Multiple Choice

Identify the statement that is true of perfection by attachment of consumer goods.

• A) If the secured party filed a financing statement for the collateral, the new buyer takes the collateral free of any security interest.
• B) If the goods are to become fixtures, the creditor can get full protection through perfection by attachment.
• C) If the new buyer buys from the debtor without knowledge of the interest, for value, and for personal use, the new buyer takes free of the security interest.
• D) If the consumer goods are motor vehicles for which the state issues certificates of title, perfection by attachment to the vehicle is effective.

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Definitions:

Beginning of the Year Balance

The amount of money or value of an account at the start of a fiscal year before any transactions have been accounted for.

Parent-Subsidiary Relationship

A corporate structure where one company (the parent) controls another company (the subsidiary) by owning a majority of its stock.

Common Stock

Common Stock represents ownership shares in a corporation, giving holders voting rights and a share in the company’s profits via dividends.

Cost Method

An accounting approach where investments are recorded at their acquisition cost, without subsequent change for market value fluctuations.