A contract in which a business selling an asset on credit gets a security interest in that asset (the collateral), protecting its legal rights in case the buyer fails to pay, is a ________.
A)lockbox
B)classic collection blunder
C)way to protect the buyer
D)security agreement

Question

Quizplus · Accepted Answer

A security agreement is a contract that provides a business with a security interest in an asset (the collateral) as protection against the buyer's default. This allows the business to take possession of and sell the collateral to recover any money owed.

A Contract in Which a Business Selling an Asset on Credit