Module: General Practice
Q113: Identify the pair of "Charge Type" and "Asset Nature" that is INCORRECTLY matched:
✅ Correct Answer: D
Option D is the Incorrect Match.
Assignment: The correct charge for Book Debts (Receivables) or Insurance Policies is Assignment, which involves the transfer of rights or benefits to the lender.
Lien: A Lien is the right to retain possession of goods or securities belonging to a debtor until the debt is paid.
It is typically used for fixed deposits (Banker's Lien) or goods already in the bank's possession.
It is not the primary mode for charging Book Debts.
Hypothecation: A charge on movable property (existing or future) where possession remains with the borrower (e.g., vehicle loans). Pledge: Bailment of goods as security where possession must be transferred to the lender (e.g., gold loans).
Assignment: The correct charge for Book Debts (Receivables) or Insurance Policies is Assignment, which involves the transfer of rights or benefits to the lender.
Lien: A Lien is the right to retain possession of goods or securities belonging to a debtor until the debt is paid.
It is typically used for fixed deposits (Banker's Lien) or goods already in the bank's possession.
It is not the primary mode for charging Book Debts.
Hypothecation: A charge on movable property (existing or future) where possession remains with the borrower (e.g., vehicle loans). Pledge: Bailment of goods as security where possession must be transferred to the lender (e.g., gold loans).