Quiz 4 Results

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Amanda Korbutiak

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Jul 31, 2012, 11:01:54 PM7/31/12
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Here's mine! Thanks for the input on that answer. :)
~Amanda


  • Question 1

    0.5 out of 0.5 points
    Correct
    Amy Carr looked at a 1996 Ford being sold by a private party who told her that the car was free and clear of all encumbrances. Carr had the Ford inspected by her Automobile Association, which reported it to be in good condition. Carr bought the Ford for $8,000. Two months later, the car was seized by a chattel mortgagee bank that had properly registered its claim in the registry within the time allowed by the Act governing chattel mortgages. Which one of the following is true?
    Selected Answer:   
    The chattel mortgagee would get the Ford because it properly registered its chattel mortgage on time.
    Correct Answer:   
    The chattel mortgagee would get the Ford because it properly registered its chattel mortgage on time.
    Answer Feedback:
    You are correct! Registration perfects a secured transaction and gives priority to the secured creditor. (Topic 8.4)

    Source: Ruth Yates, Business Law in Canada: Test Item File, 6th edition (Prentice Hall, 2002), Question 6, page 344. ISBN: 0-13-088202-X

  • Question 2

    0.5 out of 0.5 points
    Correct
    In which situation below is the debtor giving a chose in action as collateral security to the creditor?
    Selected Answer:   
    A student pledges her Canada Savings Bonds to the bank for a loan to purchase a computer.
    Correct Answer:   
    A student pledges her Canada Savings Bonds to the bank for a loan to purchase a computer.
    Answer Feedback:
    You are correct! Bonds are choses in action. A bond, like a cheque or a promissory note, is paper that represents an obligation to pay. (Topic 8.3)

  • Question 3

    0.5 out of 0.5 points
    Correct
    From which of the following borrowers would a chartered bank not be able to obtain security under section 427 of the Bank Act (1991)?
    Selected Answer:   
    A builder
    Correct Answer:   
    A builder
    Answer Feedback:
    You are correct! Fishermen, manufacturers, and farmers are all specified types of borrowers mentioned in section 427 of the Bank Act. Builders are not. (Topic 8.5)

  • Question 4

    0.5 out of 0.5 points
    Correct
    Adnane purchases a car from Rodolfo. Adnane will take possession of the car immediately and will pay Rodolfo $500 per month for 10 months. At the end of that period of time, Adnane will get title to the car. What is this transaction called?
    Selected Answer:   
    Conditional sale
    Correct Answer:   
    Conditional sale
    Answer Feedback:
    You are correct! In a conditional sale, the seller retains title to the goods sold but possession of the property is transferred to the buyer, who will pay the purchase price in a series of instalments. Title is transferred to the buyer once the last payment has been made. (Topic 8.3)

  • Question 5

    0 out of 0.5 points
    Incorrect
    Which of the following statements is true under the Bankruptcy and Insolvency Act?
    Selected Answer:   
    An assignment is initiated by the creditors of the debtor.
    Correct Answer:   
    A receiving order is initiated by the creditors of the debtor.
    Answer Feedback:
    Incorrect. An assignment is initiated by the debtor, not the creditors. The correct answer is, a receiving order is initiated by the creditors of the debtor. (Topic 8.6)

  • Question 6

    0.5 out of 0.5 points
    Correct
    Which one of the following statements comparing a conditional sale and a chattel mortgage is true?
    Selected Answer:   
    In a chattel mortgage and in a conditional sale, the debtor has possession of the collateral security, and the creditor has title.
    Correct Answer:   
    In a chattel mortgage and in a conditional sale, the debtor has possession of the collateral security, and the creditor has title.
    Answer Feedback:
    You are correct! In a chattel mortgage and in a conditional sale, the debtor has possession of the collateral security, and the creditor has title. (Topic 8.3)

  • Question 7

    0.5 out of 0.5 points
    Correct
    In case of default by the debtor, what can a secured creditor do?
    Selected Answer:   
    Repossess the secured goods and sell them
    Correct Answer:   
    Repossess the secured goods and sell them
    Answer Feedback:
    You are correct! The creditor can repossess the secured goods and sell them when the debtor defaults. (Topic 8.3)

  • Question 8

    0.5 out of 0.5 points
    Correct
    Which of the following statements correctly describes a security lease?
    Selected Answer:   
    The lease is meant to protect the owner’s financial investment in the chattel.
    Correct Answer:   
    The lease is meant to protect the owner’s financial investment in the chattel.
    Answer Feedback:
    You are correct! In a security lease, a type of purchase lease, the intent is to transfer ownership to the lessee when the lease terminates. If the lessee defaults on its rental payments, the owner will be able to step in and retake possession of the chattel. So the lease protects the owner’s financial investment. (Topic 8.2)

  • Question 9

    0.5 out of 0.5 points
    Correct
    Which one of the following are negotiable instruments?
    Selected Answer:   
    Promissory notes, drafts, and cheques
    Correct Answer:   
    Promissory notes, drafts, and cheques
    Answer Feedback:
    You are correct! A negotiable instrument is a written document, a chose in action such as a bill of exchange (or a bank draft), a promissory note, or a cheque, which is evidence of a promise, express or implied, to pay a specific sum of money to the order of a specific person or to a bearer. (Topic 8.1)

  • Question 10

    0.5 out of 0.5 points
    Correct
    In which order will a trustee in bankruptcy settle claims of creditors?
    Selected Answer:   
    The trustee will settle claims from secured creditors before the claims of preferred creditors.
    Correct Answer:   
    The trustee will settle claims from secured creditors before the claims of preferred creditors.
    Answer Feedback:
    You are correct! Secured creditors have priority over preferred creditors with respect to the assets in which they have a security interest. (Topic 8.7)

  • Question 11

    0.5 out of 0.5 points
    Correct
    Which of the following is not an example of a secured transaction?
    Selected Answer:   
    A promissory note
    Correct Answer:   
    A promissory note
    Answer Feedback:
    You are correct! A promissory note contains an express promise to pay, but is not secured to any specific asset. (Topic 8.3)

  • Question 12

    0.5 out of 0.5 points
    Correct
    Which of the following statements best describes collateral security?
    Selected Answer:   
    It is incidental to the main contract.
    Correct Answer:   
    It is incidental to the main contract.
    Answer Feedback:
    You are correct! Collateral security is property pledged by the promisor as a guarantee that it will perform its obligation. It is collateral or incidental to the main purpose of the contract between the parties. (Topic 8.3)

Fofana Fatoumata

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Aug 1, 2012, 2:39:50 AM8/1/12
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My quizz #4

  • Question 1

    0.5 out of 0.5 points

  		•
    Correct
    In a rental agreement, what are the names for (i) the party who transfers possession of property for a period of time and (ii) the party who provides periodic money payments for the possession of the rented property?
    Selected Answer:   
    (i) Lessor and (ii) lessee
    Correct Answer:   
    (i) Lessor and (ii) lessee
    Answer Feedback:
    You are correct! The lessor transfers possession of the property for a period of time, and the lessee provides consideration in the form of a periodic money payment. (Topic 8.2)

  • Question 2

    0.5 out of 0.5 points

  		•
    Correct
  • In which order will a trustee in bankruptcy settle claims of creditors?
  • Selected Answer:   
    The trustee will settle claims from secured creditors before the claims of preferred creditors.
    Correct Answer:   
    The trustee will settle claims from secured creditors before the claims of preferred creditors.
    Answer Feedback:
    You are correct! Secured creditors have priority over preferred creditors with respect to the assets in which they have a security interest. (Topic 8.7)

  • Question 3

    0.5 out of 0.5 points

  		•
    Correct
    Nick has a consulting business with monthly billings of $4,000. He rents his office, hardware, and furniture, and owns few assets. Nick rents his apartment, has no car, and spends most of his income on leisure. If he came to you and asked to borrow $10,000 for the purpose of increasing his working capital, which of the following securities would you most likely request?
    Selected Answer:   
    Assignment of accounts receivable
    Correct Answer:   
    Assignment of accounts receivable
    Answer Feedback:
    You are correct! The creditor is given the right to collect money owed to the business in the event of a default. (Topic 8.3)
    Source: Ruth Yates, Business Law in Canada: Test Item File, 6th edition (Prentice Hall, 2002), Question 32, page 354. ISBN: 0-13-088202-X

  • Question 4

    0.5 out of 0.5 points

  		•
    Correct
    Regarding secured creditors in bankruptcy proceedings, which of the following statements is true?
    Selected Answer:   
    They retain a prior claim to the value of the amount owed on the asset used as security.
    Correct Answer:   
    They retain a prior claim to the value of the amount owed on the asset used as security.
    Answer Feedback:
    You are correct! Secured creditors retain a prior claim on the amount owed on the asset used as a security. (Topic 8.7)

  • Question 5

  • 0.5 out of 0.5 points

  		•
    Correct
    In which one of the following situations is a chose in action given as security by a debtor to a creditor?
    Selected Answer:   
    A dentist assigns her accounts receivable to the bank that lent her money for the purchase of a business.
    Correct Answer:   
    A dentist assigns her accounts receivable to the bank that lent her money for the purchase of a business.
    Answer Feedback:
    You are correct! An account receivable is a chose in action. (Topic 8.3)
    Source: Ruth Yates, Business Law in Canada: Test Item File, 6th edition (Prentice Hall, 2002), Question 3, page 343. ISBN: 0-13-088202-X

  • Question 6

    0.5 out of 0.5 points

  		•
    Correct
  • Adnane purchases a car from Rodolfo. Adnane will take possession of the car immediately and will pay Rodolfo $500 per month for 10 months. At the end of that period of time, Adnane will get title to the car. What is this transaction called?
  • Selected Answer:   
    Conditional sale
    Correct Answer:   
    Conditional sale
    Answer Feedback:
    You are correct! In a conditional sale, the seller retains title to the goods sold but possession of the property is transferred to the buyer, who will pay the purchase price in a series of instalments. Title is transferred to the buyer once the last payment has been made. (Topic 8.3)

  • Question 7

    0.5 out of 0.5 points

  		•
    Correct
    In a secured transaction, the creditor’s right to payment of a debt may be secured by his taking title to certain assets. In which one of the following types of transactions do those assets consist entirely of intangible property?
    Selected Answer:   
    Assignment of accounts receivable
    Correct Answer:   
    Assignment of accounts receivable
    Answer Feedback:
    You are correct! Accounts receivable are choses in action. (Topic 8.3)
    Source: Ruth Yates, Business Law in Canada: Test Item File, 6th edition (Prentice Hall, 2002), Question 44, page 359. ISBN: 0-13-088202-X

  • Question 8

    0.5 out of 0.5 points

  		•
    Correct
    Under the Bankruptcy and Insolvency Act, which one of the following is true?
    Selected Answer:   
    Under the Bankruptcy and Insolvency Act, a consumer proposal is initiated by the debtor.
    Correct Answer:   
    Under the Bankruptcy and Insolvency Act, a consumer proposal is initiated by the debtor.
    Answer Feedback:
    You are correct! A consumer proposal is initiated by the debtor. (Topic 8.6)

  • Question 9

    0.5 out of 0.5 points

  		•
    Correct
    Sonny bought a computer from The Bad Guys Computer Store on a conditional sales contract. Two months later, Sonny sold the computer to Fred without disclosing the existence of the conditional sales contract. Can The Bad Guys recover the computer from Fred despite the fact that Fred is an innocent purchaser?
    Selected Answer:   
    Yes, if the conditional sales contract was properly registered with the province before the computer was resold to Fred.
    Correct Answer:   
    Yes, if the conditional sales contract was properly registered with the province before the computer was resold to Fred.
    Answer Feedback:
    You are correct! If The Bad Guys has properly registered its security interest before the resale to Fred, then Fred would have had the opportunity to find out about the security interest before making the purchase. (Topic 8.4)

  • Question 10

    0.5 out of 0.5 points

  		•
    Correct
    Which one of the following is true about a conditional sale?
    Selected Answer:   
    The seller transfers title in the goods once the last payment has been made.
    Correct Answer:   
    The seller transfers title in the goods once the last payment has been made.
    Answer Feedback:
    You are correct! In a conditional sale, the seller retains title or property in the goods sold but possession of the property is transferred to the buyer who will pay the purchase price in a series of instalments. Title is transferred to the buyer once the last payment has been made. (Topic 8.3)

  • Question 11

    0.5 out of 0.5 points

  		•
    Correct
  • Which of the following statements is true under the Bankruptcy and Insolvency Act?
  • Selected Answer:   
  • A receiving order is initiated by the creditors of the debtor.
  • Correct Answer:   
    A receiving order is initiated by the creditors of the debtor.
  • Answer Feedback:
    You are correct! A receiving order is initiated by the creditors of the debtor. (Topic 8.6)

  • Question 12

    0.5 out of 0.5 points

  		•
    Correct
  • Which one of the following are negotiable instruments?
  • Selected Answer:   
    Promissory notes, drafts, and cheques
    Correct Answer:   
    Promissory notes, drafts, and cheques
    Answer Feedback:
    You are correct! A negotiable instrument is a written document, a chose in action such as a bill of exchange (or a bank draft), a promissory note, or a cheque, which is evidence of a promise, express or implied, to pay a specific sum of money to the order of a specific person or to a bearer. (Topic 8.1)
Wednesday, August 1, 2012 2:36:59 AM EDT
 
Fatoumata Fofana

From: Amanda Korbutiak <atit...@gmail.com>
To: lw1-s...@googlegroups.com
Sent: Tuesday, July 31, 2012 9:01:54 PM
Subject: {LW1 Summer} Quiz 4 Results

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