1
AFIP Certification Test Bank (New
2025/2026 Update) 500 Questions with
Verified Answers | 100% Correct.
(True/False): Ignorance of the law will shield you from liability if you are
noncompliant. - (answers)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. -
(answers)True
In a typical credit transaction the (bank)/(dealer) is the creditor. - (answers)The
dealer is the creditor
What is a contract? - (answers)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: - (answers)1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements: - (answers)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)
,2
An offer may be terminated by: - (answers)1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - (answers)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 - (answers)Generally requires that all contracts involving
the sale of goods for a price of $500 or more be in writing.
The Statute of Frauds requires a written contract for the sale of goods for a price
of _______ or more. - (answers)$500
What is required in order for the parties (the individuals entering into the
contract) to have "legal capacity?" - (answers)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: - (answers)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
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3. The act of fraudulent inducement
What is "consideration" as it applies to a contract? - (answers)The requirement
that each party to the contract receives something of value in exchange for what
is given.
Finance Charge - (answers)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.
How the Itemization of Amount Financed is completed - (answers)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 - (answers)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
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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 - (answers)Promise to Pay - This section outlines the purpose of
the transaction and the primary obligations that will be incurred from signing the
contract.
The difference between full or partial recourse and no recourse assignments. -
(answers)Essentially determines the length of time, if any, the seller is responsible
for the actions of the buyer.
Warranty disclaimers do not apply to _______ warranties on new or used vehicles
to which that warranty still applies. - (answers)Manufacturer's
A(n) _______ clause allows the creditor to declare the entire outstanding balance
due and payable. - (answers)Acceleration
As recorded on an installment sale agreement, the total sale price or deferred
contract price would be the total of the ________. - (answers)-Payments
-Downpayment
-Net Trade-In
AFIP Certification Test Bank (New
2025/2026 Update) 500 Questions with
Verified Answers | 100% Correct.
(True/False): Ignorance of the law will shield you from liability if you are
noncompliant. - (answers)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. -
(answers)True
In a typical credit transaction the (bank)/(dealer) is the creditor. - (answers)The
dealer is the creditor
What is a contract? - (answers)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: - (answers)1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements: - (answers)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)
,2
An offer may be terminated by: - (answers)1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - (answers)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 - (answers)Generally requires that all contracts involving
the sale of goods for a price of $500 or more be in writing.
The Statute of Frauds requires a written contract for the sale of goods for a price
of _______ or more. - (answers)$500
What is required in order for the parties (the individuals entering into the
contract) to have "legal capacity?" - (answers)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: - (answers)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
3. The act of fraudulent inducement
What is "consideration" as it applies to a contract? - (answers)The requirement
that each party to the contract receives something of value in exchange for what
is given.
Finance Charge - (answers)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.
How the Itemization of Amount Financed is completed - (answers)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 - (answers)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
, 4
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 - (answers)Promise to Pay - This section outlines the purpose of
the transaction and the primary obligations that will be incurred from signing the
contract.
The difference between full or partial recourse and no recourse assignments. -
(answers)Essentially determines the length of time, if any, the seller is responsible
for the actions of the buyer.
Warranty disclaimers do not apply to _______ warranties on new or used vehicles
to which that warranty still applies. - (answers)Manufacturer's
A(n) _______ clause allows the creditor to declare the entire outstanding balance
due and payable. - (answers)Acceleration
As recorded on an installment sale agreement, the total sale price or deferred
contract price would be the total of the ________. - (answers)-Payments
-Downpayment
-Net Trade-In
