Multiple Choice Questions
1. CPA QUESTION Under the UCC Secured Transactions Article, which of the following actions will
best perfect a security interest in a negotiable instrument against any other party?
(a) Filing a security agreement
(b) Taking possession of the instrument
(c) Perfecting by attachment
(d) Obtaining a duly executed financing statement
Answer: B. CPA Examination, May 1994, #50.
2. CPA QUESTION Under the UCC Secured Transactions Article, perfection of a security interest by a
creditor provides added protection against other parties in the event the debtor does not pay its debts.
Which of the following parties is not affected by perfection of a security interest?
(a) Other prospective creditors of the debtor
(b) The trustee in a bankruptcy case
(c) A buyer in ordinary course of business
(d) A subsequent personal injury judgment creditor
Answer: C. CPA Examination, May 1994, #51.
3. CPA QUESTION Mars, Inc., manufactures and sells VCRs on credit directly to wholesalers,
retailers, and consumers. Mars can perfect its security interest in the VCRs it sells without having to
file a financing statement or take possession of the VCRs if the sale is made to which of the
following:
(a) Retailers
(b) Wholesalers that sell to distributors for resale
(c) Consumers
(d) Wholesalers that sell to buyers in ordinary course of business
Answer: C. CPA Examination, May 1993, #47.
4. When Michelle buys a laptop, she pays an extra fee so that the computer arrives at her door with the
latest version of Microsoft Word pre-installed. Under Article 9, the word processing program is
considered:
(a) "goods"
(b) "services"
(c) "software"
(d) none of the above
Answer: A.
5. Alpha perfects its security interest by properly filing a financing statement on January 1, 2010. Alpha
files a continuation statement on September 1, 2014. It files another continuation statement on
September 1, 2018. When will Alpha's financing statement expire?
(a) January 1, 2015
(b) September 1, 2019
(c) September 1, 2023
(d) Never
Answer: B.