In a Dispute Between Dennis,ABC Electronics,and XYZ Credit Regarding Entitlement

question 53

Multiple Choice

In a dispute between Dennis,ABC Electronics,and XYZ Credit regarding entitlement to the television,who is likely to win and why?

• A) ABC Electronics will prevail because, as a seller of consumer goods, it did not need a perfected security interest in order to prevail against other creditors.
• B) ABC Electronics will prevail because it had a perfected security interest.
• C) XYZ Credit will prevail because although ABC Electronics had a perfected security interest, it did not file a financing statement.
• D) XYZ Credit will prevail because a luxury good was involved and, although ABC Electronics had a perfected security interest, it did not file a financing statement as required within 10 days of the sale.
• E) XYZ Credit will prevail because it had a perfected security interest in a greater amount of goods than did ABC Electronics.

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Definitions:

Cost Of Goods Sold

This refers to the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Average Merchandise Inventory

The mean value of a company's inventory over a certain period, calculated to assess inventory levels and cost of goods sold.

Turnover Ratio Calculation

A measurement that calculates how frequently an asset or portfolio is replaced or traded during a specific period.

Ending Inventory Balance

The total value of all inventory held by a company at the end of an accounting period.