AFIP Certification Practice Exam With
Complete Questions And Correct
Answers| Brand New Version!
(True/False): Ignorance of the law will shield you from liability if you are
noncompliant. - 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. -
ANSWER>>True
In a typical credit transaction the (bank)/(dealer) is the creditor. - ANSWER>>The
dealer is the creditor
What is a contract? - 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: - ANSWER>>1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements: - 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: - ANSWER>>1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - 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 - ANSWER>>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. - ANSWER>>$500
What is required in order for the parties (the individuals entering into the
contract) to have "legal capacity?" - 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: - 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? - ANSWER>>The requirement
that each party to the contract receives something of value in exchange for what
is given.
Finance Charge - 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.
How the Itemization of Amount Financed is completed - 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 - 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 - ANSWER>>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. -
ANSWER>>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. - ANSWER>>Manufacturer's
A(n) _______ clause allows the creditor to declare the entire outstanding balance
due and payable. - ANSWER>>Acceleration
As recorded on an installment sale agreement, the total sale price or deferred
contract price would be the total of the ________. - ANSWER>>-Payments
-Downpayment
-Net Trade-In
, Which is NOT listed as a mandated TILA box disclosure? - ANSWER>>Holder-in-
Due Course Notice
In most states, the _______ is deemed to be part of the purchase agreement. -
ANSWER>>Buyer's Guide
(True/False) Because the late charges that may be imposed on an installment sale
agreement are regulated at the state level, the amount of the late charge is NOT a
required disclosure item. - ANSWER>>False
At the time of consummation, an installment sale contract is between the
_______ and the _______. - ANSWER>>Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale transactions for
vehicles purchased for what type(s) of uses? - ANSWER>>Personal, Family or
Household
What is always the largest number on an installment sale agreement? -
ANSWER>>The total sale price
What does "force-placed" or "creditor-placed" mean? - ANSWER>>Allows the
creditor to force place insurance - that is, buy physical damage insurance to cover
the creditor's interest in the vehicle or the creditor's and the buyer's interest in
the vehicle if the buyer fails to do so.
(True/False) Installment sale agreements notify the customer of the state's laws
regarding repossession and how (if applicable) the customer can redeem the
vehicle or reinstate the contract. - ANSWER>>True
How are installment sale contracts regulated? - ANSWER>>By federal and state
law
Complete Questions And Correct
Answers| Brand New Version!
(True/False): Ignorance of the law will shield you from liability if you are
noncompliant. - 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. -
ANSWER>>True
In a typical credit transaction the (bank)/(dealer) is the creditor. - ANSWER>>The
dealer is the creditor
What is a contract? - 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: - ANSWER>>1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements: - 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: - ANSWER>>1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - 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 - ANSWER>>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. - ANSWER>>$500
What is required in order for the parties (the individuals entering into the
contract) to have "legal capacity?" - 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: - 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? - ANSWER>>The requirement
that each party to the contract receives something of value in exchange for what
is given.
Finance Charge - 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.
How the Itemization of Amount Financed is completed - 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 - 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 - ANSWER>>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. -
ANSWER>>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. - ANSWER>>Manufacturer's
A(n) _______ clause allows the creditor to declare the entire outstanding balance
due and payable. - ANSWER>>Acceleration
As recorded on an installment sale agreement, the total sale price or deferred
contract price would be the total of the ________. - ANSWER>>-Payments
-Downpayment
-Net Trade-In
, Which is NOT listed as a mandated TILA box disclosure? - ANSWER>>Holder-in-
Due Course Notice
In most states, the _______ is deemed to be part of the purchase agreement. -
ANSWER>>Buyer's Guide
(True/False) Because the late charges that may be imposed on an installment sale
agreement are regulated at the state level, the amount of the late charge is NOT a
required disclosure item. - ANSWER>>False
At the time of consummation, an installment sale contract is between the
_______ and the _______. - ANSWER>>Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale transactions for
vehicles purchased for what type(s) of uses? - ANSWER>>Personal, Family or
Household
What is always the largest number on an installment sale agreement? -
ANSWER>>The total sale price
What does "force-placed" or "creditor-placed" mean? - ANSWER>>Allows the
creditor to force place insurance - that is, buy physical damage insurance to cover
the creditor's interest in the vehicle or the creditor's and the buyer's interest in
the vehicle if the buyer fails to do so.
(True/False) Installment sale agreements notify the customer of the state's laws
regarding repossession and how (if applicable) the customer can redeem the
vehicle or reinstate the contract. - ANSWER>>True
How are installment sale contracts regulated? - ANSWER>>By federal and state
law
