A bill of sale can be used as an instrument of credit. Which document is the bill of sale most like when it is used as an instrument of credit?
A) an assignment
B) a consignment agreement
C) a chattel mortgage
D) a negotiable instrument
E) a pledge

Question

Quizplus · Accepted Answer

When a bill of sale is used as an instrument of credit, it functions like a chattel mortgage. This means that the creditor takes a security interest in the item being sold and the debtor retains possession of the item. If the debtor defaults on the loan, the creditor can repossess the item to satisfy the debt.

A Bill of Sale Can Be Used as an Instrument