Question

Careful Credit Corporation files a financing statement regarding a transaction with Design Services Company. To be valid, the financing statement must contain all of the following except

a. a description of the collateral.
b. the debtor's name.
c. the reason for the transaction.
d. the secured party's name.

Answer 1

A financing statement must contain a description of the collateral, the debtor's name, and the secured party's name, but it does not require the reason for the transaction to be included. Option C is correct.

Step-by-step explanation:

The question is asking which of the options is not required to be included in a financing statement to be valid.

A financing statement is a legal document that provides notice to the public that a particular party has a security interest in the collateral of a debtor. It is typically filed with a government agency, such as the Secretary of State, and includes information about the debtor, the secured party, and the collateral.

The correct answer to the question is c. the reason for the transaction. While a financing statement must contain a description of the collateral, the debtor's name, and the secured party's name, it does not require the reason for the transaction to be included.