CPA · Question 15 · Area II: Business Law
On May 1, Vendor A sold a machine to Debtor on credit and retained a security interest. Vendor A delivered the machine on May 5. Vendor A filed a financing statement on May 12. On May 8, Lender B loaned money to Debtor, took a security interest in the same machine, and filed a financing statement immediately. Who has priority?
Answer options:
Vendor A, because it had a Purchase Money Security Interest (PMSI) and filed within the 20-day grace period.
Lender B, because it filed first.
Lender B, because Vendor A did not file before Lender B's loan.
Vendor A, because it attached its interest before Lender B.
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