Which type of collateral must be reasonably and specifically described according to secured transaction rules?

In the context of secured transactions, consumer goods must be reasonably and specifically described for the purpose of creating a valid security interest. This specificity is vital because it enables the parties involved, as well as third parties, to easily identify the collateral that secures the loan or obligation. The Uniform Commercial Code (UCC) requires that for a security interest in consumer goods to be enforceable against third parties, the description must not only be adequate to identify the goods but must also be specific enough to avoid confusion with other types of goods.

In the case of consumer goods, this requirement ensures that clear delineation exists between various items classified under this category, particularly because these items are often movable and may vary in type, value, and condition. On the other hand, other types of collateral such as residential real estate and intellectual property have distinct rules regarding their description due to their unique characteristics and registration requirements. While current cash assets also have specific reporting requirements, the description of consumer goods under UCC mandates a particular focus on reasonable identification, making this option the most fitting response.