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AFIP Basic Certification Practice
Exam With Complete Questions
And Correct Answers
(True/False): Ignorance of the law will shield you from liability if you are
noncompliant.-correct-answer-False
(True/False): As an F&I manager working directly with customers, you are
individually responsible for your actions and what you say to each customer.-
correct-answer-True
In a typical credit transaction the (bank)/(dealer) is the creditor.-correct-answer-
The dealer is the creditor
What is a contract?-correct-answer-A contract is an agreement involving a
promise or set of promises that the law enforces or protects.
The formation of a contract requires three elements:-correct-answer-1. Offer
2. Acceptance
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3. Consideration
An offer consists of three elements:-correct-answer-1. An expression of a promise
or commitment (intent) to enter a contract
2. An expression of definite and certain terms
3. The communication of the offer to the offeree (in this case, the customer)
An offer may be terminated by:-correct-answer-1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer:-correct-answer-1. The offer
is accepted by one who is entitled to accept
2. The acceptance takes the proper form and is timely
3. The terms of acceptance reflect closely the terms of the offer and, therefore, do
not amount to a counteroffer
The Statute of Frauds-correct-answer-Generally requires that all contracts
involving the sale of goods for a price of $500 or more be in writing.
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The Statute of Frauds requires a written contract for the sale of goods for a price
of_______ or more.-correct-answer-$500
What is required in order for the parties (the individuals entering into the
contract) to have "legal capacity?"-correct-answer-The parties to the contract
must be of legal age under the laws of the state in which the contract is written.
Criteria that can block the formation of a valid contract:-correct-answer-1. The
need for a written agreement under the Statute of Frauds and certain provisions
of the Uniform Commercial Code (U.C.C.)
2. The need for legal capacity of a party to contract
3. The act of fraudulent inducement
What is "consideration" as it applies to a contract?-correct-answer-The
requirement that each party to the contract receives something of value in
exchange for what is given.
Finance Charge-correct-answer-The Finance Charge is the resulting dollar amount
calculated by applying the Annual Percentage Rate to the Amount Financed over
the term of the contract.
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How the Itemization of Amount Financed is completed-correct-answer-1. Cash
Price (Agreed to price of vehicle)
2. Total Downpayment
3. Unpaid Balance of Cash Price(Cash Price-Downpayment)
4. Other Charges (GAP, VSC, Etc.)
5. Amount Financed
4 Key Sections of an installment sale contract-correct-answer-Section A) General
Information -- Identifies the parties to the agreement.
Section B) Mandated Disclosures -- Disclosures required by TILA
Section C) Insurance-Related Disclosures --Credit insurance is optional
Section D) Signature Blocks - Notice to Buyer Disclosures --Bind all parties to
contract
The introductory information and promise to pay contained in Section A of Retail
Installment Form-correct-answer-Promise to Pay - This section outlines the
purpose of the transaction and the primary obligations that will be incurred from
signing the contract.
AFIP Basic Certification Practice
Exam With Complete Questions
And Correct Answers
(True/False): Ignorance of the law will shield you from liability if you are
noncompliant.-correct-answer-False
(True/False): As an F&I manager working directly with customers, you are
individually responsible for your actions and what you say to each customer.-
correct-answer-True
In a typical credit transaction the (bank)/(dealer) is the creditor.-correct-answer-
The dealer is the creditor
What is a contract?-correct-answer-A contract is an agreement involving a
promise or set of promises that the law enforces or protects.
The formation of a contract requires three elements:-correct-answer-1. Offer
2. Acceptance
,2|Page
3. Consideration
An offer consists of three elements:-correct-answer-1. An expression of a promise
or commitment (intent) to enter a contract
2. An expression of definite and certain terms
3. The communication of the offer to the offeree (in this case, the customer)
An offer may be terminated by:-correct-answer-1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer:-correct-answer-1. The offer
is accepted by one who is entitled to accept
2. The acceptance takes the proper form and is timely
3. The terms of acceptance reflect closely the terms of the offer and, therefore, do
not amount to a counteroffer
The Statute of Frauds-correct-answer-Generally requires that all contracts
involving the sale of goods for a price of $500 or more be in writing.
,3|Page
The Statute of Frauds requires a written contract for the sale of goods for a price
of_______ or more.-correct-answer-$500
What is required in order for the parties (the individuals entering into the
contract) to have "legal capacity?"-correct-answer-The parties to the contract
must be of legal age under the laws of the state in which the contract is written.
Criteria that can block the formation of a valid contract:-correct-answer-1. The
need for a written agreement under the Statute of Frauds and certain provisions
of the Uniform Commercial Code (U.C.C.)
2. The need for legal capacity of a party to contract
3. The act of fraudulent inducement
What is "consideration" as it applies to a contract?-correct-answer-The
requirement that each party to the contract receives something of value in
exchange for what is given.
Finance Charge-correct-answer-The Finance Charge is the resulting dollar amount
calculated by applying the Annual Percentage Rate to the Amount Financed over
the term of the contract.
, 4|Page
How the Itemization of Amount Financed is completed-correct-answer-1. Cash
Price (Agreed to price of vehicle)
2. Total Downpayment
3. Unpaid Balance of Cash Price(Cash Price-Downpayment)
4. Other Charges (GAP, VSC, Etc.)
5. Amount Financed
4 Key Sections of an installment sale contract-correct-answer-Section A) General
Information -- Identifies the parties to the agreement.
Section B) Mandated Disclosures -- Disclosures required by TILA
Section C) Insurance-Related Disclosures --Credit insurance is optional
Section D) Signature Blocks - Notice to Buyer Disclosures --Bind all parties to
contract
The introductory information and promise to pay contained in Section A of Retail
Installment Form-correct-answer-Promise to Pay - This section outlines the
purpose of the transaction and the primary obligations that will be incurred from
signing the contract.
