Which Statement Is True Regarding Michael's Statement That the Security

question 11

Multiple Choice

Which statement is true regarding Michael's statement that the security interest of ABC was not perfected?

• A)Michael is correct only because in the case of luxury goods,a financing statement must be filed within 20 days of the sale in order for the seller to establish perfection.
• B)Michael is correct because the security interest perfected when he was still in possession of the collateral 30 days after the purchase.
• C)Michael is wrong because the security interest perfected immediately.
• D)Michael is correct because no financing statement was filed.
• E)Michael is correct because the security interest perfected when he was still in possession of the collateral 60 days after the purchase.

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Definitions:

Cost of Sale

Costs directly related to the production of the goods sold by a company.

Merchandise Inventory

Goods that a retailer, wholesaler, or distributor holds for the purpose of selling to customers in the normal course of business.

Perpetual Inventory System

A method of accounting for inventory that records real-time transactions of goods as they come in and out of stock, thus maintaining a continuously updated inventory balance.