Quiz# 4

[liliana.cavalheiro]

Hi Everyone,

 

 

Here is Quiz #4

 

Question 1

 

 

0.5 out of 0.5 points

 

 

	Which of the following statements correctly describes a security lease? Answer
	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 2

0.5 out of 0.5 points

	Regarding secured creditors in bankruptcy proceedings, which of the following statements is true? Answer
	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 3

0.5 out of 0.5 points

	Which of the following transactions creates a security interest? Answer
	Selected Answer: A chattel mortgage Correct Answer: A chattel mortgage Answer Feedback: You are correct! A chattel mortgage creates a security interest because the borrower transfers an interest in property to the lender as security for a debt. (Topic 8.3)

 

Question 4

0.5 out of 0.5 points

	How does the accounting profession determine whether a lease is an operating lease or a capital lease? Answer
	Selected Answer: By determining whether title is likely to pass to the lessee at the end of the lease period Correct Answer: By determining whether title is likely to pass to the lessee at the end of the lease period Answer Feedback: You are correct! Whether or not title is likely to transfer at the end of the lease period is an important consideration in determining whether a lease is classified as operating or capital. (Topic 8.2)

 

Question 5

0.5 out of 0.5 points

	Which of the following statements correctly describes a finance lease? Answer
	Selected Answer: The lease is meant to protect the third party’s financial investment in the chattel. Correct Answer: The lease is meant to protect the third party’s financial investment in the chattel. Answer Feedback: You are correct! In a finance lease, a third party advances the funds to the owner/vendor, takes title (ownership) to the chattel, and transfers possession to the lessee. If the lessee defaults on its rental payments, the third party will be able to step in and retake possession of the chattel. (Topic 8.2)

 

Question 6

0.5 out of 0.5 points

	Which one of the following are negotiable instruments? Answer
	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 7

0.5 out of 0.5 points

	Which of the following statements is true under the Bankruptcy and Insolvency Act? Answer
	Selected Answer: A proposal allows an insolvent debtor to avoid bankruptcy. Correct Answer: A proposal allows an insolvent debtor to avoid bankruptcy. Answer Feedback: You are correct! A proposal is an arrangement between the debtor and its creditors that allows an insolvent debtor to avoid bankruptcy. (Topic 8.6)

 

Question 8

0.5 out of 0.5 points

	Which one of the following is true about a conditional sale? Answer
	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 9

0.5 out of 0.5 points

	Under the Bankruptcy and Insolvency Act, which one of the following is true? Answer
	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 10

0.5 out of 0.5 points

	Angelova asks you to finance her upcoming theatre production; she needs $10,000. She does not have a car or a house, but many companies have promised to pay for the theatre tickets that she has sent them. What type of security interest would you take? Answer
	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)

 

Question 11

0.5 out of 0.5 points

	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? Answer
	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 12

• 0.5 out of 0.5 points

	Which one of the following is true about a pledge? Answer
	Selected Answer: The creditor transfers possession in the goods once the last payment has been made. Correct Answer: The creditor transfers possession in the goods once the last payment has been made. Answer Feedback: You are correct! In a pledge or pawn, a creditor (pawnbroker) takes possession of the goods as security, but the debtor retains title. Possession will be transferred back to the debtor when the loan has been repaid. (Topic 8.3)

[Mongkut Budkhunthong]

Here is mine.

• Question 1

  0.5 out of 0.5 points

• 	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? Answer
  	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

• 	Which one of the following is governed by federal statute and thus has rules common to all of Canada? Answer
  	Selected Answer: Bankruptcy Correct Answer: Bankruptcy Answer Feedback: You are correct! The Bankruptcy and Insolvency Act was adopted by the federal government in 1992. (Topic 8.6) Source: Ruth Yates, Business Law in Canada: Test Item File, 6th edition (Prentice Hall, 2002), Question 2, page 343. ISBN: 0-13-088202-X

• Question 3

  0.5 out of 0.5 points

• 	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? Answer

• 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 4

  0.5 out of 0.5 points

• 	Which of the following is an example of a negotiable instrument? Answer
  	Selected Answer: A promissory note Correct Answer: A promissory note Answer Feedback: You are correct! A promissory note is one type of negotiable instrument specified by the Bills of Exchange Act, the other two being bills of exchange (or drafts) and cheques. (Topic 8.1)

• Question 5

  0.5 out of 0.5 points

• Angelova asks you to finance her upcoming theatre production; she needs $10,000. She does not have a car or a house, but many companies have promised to pay for the theatre tickets that she has sent them. What type of security interest would you take? Answer

• 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)

• Question 6

  0.5 out of 0.5 points

• 	Which of the following statements is true about a pledge? Answer
  	Selected Answer: The creditor takes possession of the collateral security and holds it until repayment. The debtor keeps title to the collateral security. Correct Answer: The creditor takes possession of the collateral security and holds it until repayment. The debtor keeps title to the collateral security. Answer Feedback: You are correct! The creditor has possession of the goods used as security and will transfer possession to the debtor, who still has title to the goods, when he is repaid. (Topic 8.3)

• Question 7

  0.5 out of 0.5 points

• 	Which of the following statements best describes collateral security? Answer
  	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)

• Question 8

  0.5 out of 0.5 points

• Which of the following statements is true under the Bankruptcy and Insolvency Act? Answer

• 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 9

  0 out of 0.5 points

  	Which one of the following statements is true about secured transactions prior to the adoption of a Personal Property Security Act? Answer
  	Selected Answer: All kinds of security arrangements involving personal property as collateral came under one statute. Correct Answer: Various kinds of secured transactions, such as conditional sales, chattel mortgages, etc., were regulated by their own distinct statutes. Answer Feedback: Incorrect. The correct answer is, prior to the adoption of the Personal Property Security Act, each form of secured transaction was governed by its particular statute. (Topic 8.3) Source: Ruth Yates, Business Law in Canada: Test Item File, 6th edition (Prentice Hall, 2002), Question 40, page 358. ISBN: 0-13-088202-X

• Question 10

  0.5 out of 0.5 points

• Which one of the following are negotiable instruments? Answer

• 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 11

  0.5 out of 0.5 points

• 	From which of the following borrowers would a chartered bank not be able to obtain security under section 427 of the Bank Act (1991)? Answer
  	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 12

  0.5 out of 0.5 points

• 	In which situation below is the debtor giving a chose in action as collateral security to the creditor? Answer
  	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)

--