Rally Co. has purchased some inventory from Kantar Corporation to sell to customers who will use the
Question:
Corporation to sell to customers who will use the inventory primarily
for consumer use. Which of the following is not correct?
If Kantar sells the inventory to Rally on credit and takes
out a security interest using the inventory as collateral,
this a purchase money security interest.
If Kantar sells the inventory to Rally on credit and takes
out a security interest using the inventory as collateral,
this is a purchase money security interest in consumer
goods.
If Kantar sells the inventory to Rally but Rally pays for
it by getting a loan from a bank who takes out a security
interest using the inventory as collateral, this is a purchase
money security interest.
If a customer purchases some inventory on credit from
Rally for home use and signs a written security agreement
presented by Rally that lists the inventory as collateral
for the credit, this is a purchase money security
interest in consumer goods.
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston