AFIP - Basic Certification V1 Course Questions and
accurate Answers Latest Update Grade A+ (100%
Correct Elaborations)
The formation of a contract requires three elements:
1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements:
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:
1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer:
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
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.
$500
(True/False): Ignorance of the law will shield you from liability if you are noncompliant.
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.
True
In a typical credit transaction the (bank)/(dealer) is the creditor.
The dealer is the creditor
What is a contract?
A contract is an agreement involving a promise or set of promises that the law enforces or
protects.
, AFIP - Basic Certification V1 | Questions and
accurate Answers| Latest 2026/ 2027 Update
|Grade A (100% Correct)
What is required in order for the parties (the individuals entering into the contract) to have "legal
capacity?"
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:
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?
The requirement that each party to the contract receives something of value in exchange for what
is given.
Finance Charge
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
1. Cash Price (Agreed to price of vehicle)
, AFIP - Basic Certification V1 | Questions and
accurate Answers| Latest 2026/ 2027 Update
|Grade A (100% Correct)
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
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
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.
Essentially determines the length of time, if any, the seller is responsible for the actions of the
buyer.
accurate Answers Latest Update Grade A+ (100%
Correct Elaborations)
The formation of a contract requires three elements:
1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements:
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:
1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer:
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
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.
$500
(True/False): Ignorance of the law will shield you from liability if you are noncompliant.
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.
True
In a typical credit transaction the (bank)/(dealer) is the creditor.
The dealer is the creditor
What is a contract?
A contract is an agreement involving a promise or set of promises that the law enforces or
protects.
, AFIP - Basic Certification V1 | Questions and
accurate Answers| Latest 2026/ 2027 Update
|Grade A (100% Correct)
What is required in order for the parties (the individuals entering into the contract) to have "legal
capacity?"
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:
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?
The requirement that each party to the contract receives something of value in exchange for what
is given.
Finance Charge
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
1. Cash Price (Agreed to price of vehicle)
, AFIP - Basic Certification V1 | Questions and
accurate Answers| Latest 2026/ 2027 Update
|Grade A (100% Correct)
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
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
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.
Essentially determines the length of time, if any, the seller is responsible for the actions of the
buyer.
