Which of the Following Statements Is True of Sale of Collateral

question 38

Multiple Choice

Which of the following statements is true of sale of collateral?

• A) In disposing of the collateral, the creditor must use a commercially reasonable method to produce the greatest benefit to himself and not to the debtor.
• B) The creditor must sell the collateral unless the consumer orally objects to the sale, otherwise, the creditor may keep the collateral in satisfaction of the debt.
• C) If less than 80 percent of the purchase price has been paid, the creditor may propose to the debtor that the creditor keep the collateral in satisfaction of the debt.
• D) If the creditor has a security interest in consumer goods and the debtor has paid 60 percent or more of the purchase price, the creditor must sell the repossessed collateral.

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Definitions:

Expenses

Outflows of money or other valuable assets, incurred as a result of operating activities or in the pursuit of generating revenues.

Debts Incurred

Obligations or liabilities taken on during the course of financial transactions, often as a result of borrowing money or purchasing goods and services.

Owner's Equity

The residual interest in the assets of the business after deducting liabilities, representing the ownership's financial stake.

Management Efficiency

The effectiveness with which managers utilize resources and make decisions to achieve organizational goals with minimal waste or effort.