Question 1

A business signs a three-year "lease" for a very old copier that only has an additional two-year useful life. What does the business maintain?

Accepted Answer

A)   Implied agreement
B)   Security interest
C)   Rental agreement
D)   Financing statement

Question 2

According to the UCC, the true lease of goods involves the payment for __________ possession with an expectation that the goods will be returned to the owner at the end of the lease term.

Accepted Answer

A)   Permanent
B)   Quasi-Permanent
C)   Temporary
D)   Custodial

Question 3

The UCC applies its warranty rules for the sale of goods to leases.

Accepted Answer

A) True 
 B)False

Question 4

What must be included in a finance lease?

Accepted Answer

A)   Parties
B)   Goods
C)   Time for performance
D)   All of the choices are correct.

Question 5

__________ is often an attractive alternative because the business can use equipment on an exclusive basis without the large up-front investment required to purchase it.

Accepted Answer

A)   Renting
B)   Buying
C)   Selling
D)   Leasing

Question 6

What document is necessary for a lessor to file when acquiring a security interest in collateral?

Accepted Answer

A)   Service fee agreement
B)   UCC financing statement
C)   Rental Property
D)   Novation B

Question 7

What type of title does a secured transaction pass to the buyer?

Accepted Answer

A)   Express
B)   Automatic
C)   Conditional
D)   Predominant

Question 8

Lessee in ordinary course of business means a person who in good faith and without knowledge that the lease to him [or her] is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods leases in ordinary course from a person in the business of selling or leasing goods of that kind but does not include a pawnbroker.

Accepted Answer

A)   Lessor
B)   Lessor as a merchant
C)   Lessee
D)   Lessee in ordinary course of business

Question 9

What is the threshold amount in the lease which requires a writing?

Accepted Answer

A)   $500.00
B)   $750.00
C)   $1,000.00
D)   $5,000.00 C

Question 10

What does a lease not transfer?

Accepted Answer

A)   Title
B)   Goods
C)   All of the choices are correct.
D)   None of the choices are correct. A

Question 11

Article 2A applies to the lease of goods and real estate leases.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements best describes what a secured transaction is?

Accepted Answer

A)   A secured transaction is when the seller retains a security interest in the goods being sold.
B)   A secured transaction is when the seller retains title to the goods being sold.
C)   A secured transaction is when the buyer obtains a security interest in the goods being sold.
D)   A secured transaction is when the lessee obtains a security interest in the goods being sold.

Question 13

Jimmy drives a company car for Acme Corp. Acme Corp. leased the car from Toyota for three years. Jimmy drives to and from work but also uses the car to take his kids to soccer practice three times a week. Will Acme Corp be able to claim depreciation on the car or tax benefits for the mileage?

Accepted Answer

A leased car typically doesn't qualify f...

Question 14

Baked Goods Inc. wants to lease an oven from Oven Corp. for use in its bakery business. Baked Goods's bank agrees to purchase the equipment from Oven Corp. and then lease the equipment to Baked Goods. In this scenario, identify who is the lessor and the lessee and why?

Accepted Answer

The bank becomes the lessor since it pur...

Question 15

What law states that if the total payments to be made under the lease, excluding payments for options to renew or buy, are $1,000 or more, the lease must be in writing?

Accepted Answer

A)   Rule Against Perpetuities
B)   Statute of Frauds
C)   Torts
D)   Conflict of Laws

Question 16

Which party acts as a middleman in a finance lease?

Accepted Answer

A)   The lessee
B)   The supplier
C)   The seller
D)   The lessor

Question 17

Hugh's Hot Dogs is in need of push carts for their recent marketing push to local lunch time workers. In efforts to acquire additional equipment, Hugh's CEO seeks out new suppliers. They have recently decided to lease the push carts from a local restaurant supply store. The store requests a lease agreement be signed by Hugh's Hot Dogs. Who is the lessor? The lessee?

Accepted Answer

True leases always involve two parties: ...

Question 18

Jane makes payments to a company for office equipment she intends to keep at the end of the lease by renewing the lease for the remaining useful life of the equipment. What type of transaction does Jane intend to pursue?

Accepted Answer

A)   Rental agreement
B)   Lease agreement
C)   Security agreement
D)   Resale agreement

Question 19

Many business firms prefer to buy personal property, such as the machinery and heavy equipment rather than lease it.

Accepted Answer

A) True 
 B)False

Question 20

A secured transaction occurs when the seller retains a security __________ in the goods being sold.

Accepted Answer

A)   Fees
B)   Interest
C)   Property
D)   Collateral

Exam 17: UCC Article 2A: Lease Contracts

A business signs a three-year "lease" for a very old copier that only has an additional two-year useful life. What does the business maintain?

Correct Answer
verified

According to the UCC, the true lease of goods involves the payment for __________ possession with an expectation that the goods will be returned to the owner at the end of the lease term.

Correct Answer
verified

The UCC applies its warranty rules for the sale of goods to leases.

Correct Answer
verified

What must be included in a finance lease?

Correct Answer
verified

__________ is often an attractive alternative because the business can use equipment on an exclusive basis without the large up-front investment required to purchase it.

Correct Answer
verified

What document is necessary for a lessor to file when acquiring a security interest in collateral?

Correct Answer
verified
B

What type of title does a secured transaction pass to the buyer?

Correct Answer
verified

Correct Answer
verified

What is the threshold amount in the lease which requires a writing?

Correct Answer
verified
C

What does a lease not transfer?

Correct Answer
verified
A

Article 2A applies to the lease of goods and real estate leases.

Correct Answer
verified

Which of the following statements best describes what a secured transaction is?

Correct Answer
verified

Jimmy drives a company car for Acme Corp. Acme Corp. leased the car from Toyota for three years. Jimmy drives to and from work but also uses the car to take his kids to soccer practice three times a week. Will Acme Corp be able to claim depreciation on the car or tax benefits for the mileage?

Correct Answer
verified
A leased car typically doesn't qualify f...
View Answer

Baked Goods Inc. wants to lease an oven from Oven Corp. for use in its bakery business. Baked Goods's bank agrees to purchase the equipment from Oven Corp. and then lease the equipment to Baked Goods. In this scenario, identify who is the lessor and the lessee and why?

Correct Answer
verified
The bank becomes the lessor since it pur...
View Answer

What law states that if the total payments to be made under the lease, excluding payments for options to renew or buy, are $1,000 or more, the lease must be in writing?

Correct Answer
verified

Which party acts as a middleman in a finance lease?

Correct Answer
verified

Correct Answer
verified
True leases always involve two parties: ...
View Answer

Jane makes payments to a company for office equipment she intends to keep at the end of the lease by renewing the lease for the remaining useful life of the equipment. What type of transaction does Jane intend to pursue?

Correct Answer
verified

Many business firms prefer to buy personal property, such as the machinery and heavy equipment rather than lease it.

Correct Answer
verified

A secured transaction occurs when the seller retains a security __________ in the goods being sold.

Correct Answer
verified

Exam 17: UCC Article 2A: Lease Contracts

A business signs a three-year "lease" for a very old copier that only has an additional two-year useful life. What does the business maintain?

Correct AnswerverifiedShow Answer

According to the UCC, the true lease of goods involves the payment for __________ possession with an expectation that the goods will be returned to the owner at the end of the lease term.

Correct AnswerverifiedShow Answer

The UCC applies its warranty rules for the sale of goods to leases.

Correct AnswerverifiedShow Answer

What must be included in a finance lease?

Correct AnswerverifiedShow Answer

__________ is often an attractive alternative because the business can use equipment on an exclusive basis without the large up-front investment required to purchase it.

Correct AnswerverifiedShow Answer

What document is necessary for a lessor to file when acquiring a security interest in collateral?

Correct AnswerverifiedB

What type of title does a secured transaction pass to the buyer?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is the threshold amount in the lease which requires a writing?

Correct AnswerverifiedC

What does a lease not transfer?

Correct AnswerverifiedA

Article 2A applies to the lease of goods and real estate leases.

Correct AnswerverifiedShow Answer

Which of the following statements best describes what a secured transaction is?

Correct AnswerverifiedShow Answer

Jimmy drives a company car for Acme Corp. Acme Corp. leased the car from Toyota for three years. Jimmy drives to and from work but also uses the car to take his kids to soccer practice three times a week. Will Acme Corp be able to claim depreciation on the car or tax benefits for the mileage?

Correct AnswerverifiedA leased car typically doesn't qualify f...View AnswerShow Answer

Baked Goods Inc. wants to lease an oven from Oven Corp. for use in its bakery business. Baked Goods's bank agrees to purchase the equipment from Oven Corp. and then lease the equipment to Baked Goods. In this scenario, identify who is the lessor and the lessee and why?

Correct AnswerverifiedThe bank becomes the lessor since it pur...View AnswerShow Answer

What law states that if the total payments to be made under the lease, excluding payments for options to renew or buy, are $1,000 or more, the lease must be in writing?

Correct AnswerverifiedShow Answer

Which party acts as a middleman in a finance lease?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedTrue leases always involve two parties: ...View AnswerShow Answer

Jane makes payments to a company for office equipment she intends to keep at the end of the lease by renewing the lease for the remaining useful life of the equipment. What type of transaction does Jane intend to pursue?

Correct AnswerverifiedShow Answer

Many business firms prefer to buy personal property, such as the machinery and heavy equipment rather than lease it.

Correct AnswerverifiedShow Answer

A secured transaction occurs when the seller retains a security __________ in the goods being sold.

Correct AnswerverifiedShow Answer

Correct Answer
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B

Correct Answer
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C

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A

Correct Answer
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Correct Answer
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Correct Answer
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A leased car typically doesn't qualify f...
View Answer

Correct Answer
verified
The bank becomes the lessor since it pur...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified
True leases always involve two parties: ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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