QUESTION Which of the following stands at the center of international commercial transactions and is issued by a bank at the request of an importer? A. Bill of lading B. Time draft C. Letter of credit D. Sight draft E. Bill of exchange ANSWER C
Date: September 3rd, 2020
QUESTION Which of the following is an advantage of a letter of credit for an importer? A. The importer does not have to pay for the merchandise until the documents have arrived. B. Obtaining pre-export financing becomes easier. C. It helps the importer to get goods for a lower price. D. It results in lower […]
Date: September 3rd, 2020
QUESTION In international commerce, an order written by an exporter instructing an importer to pay a specified amount of money at a specified time is known as a: A. bill of lading. B. draft. C. letter of credit. D. counterpurchase. E. buyback. ANSWER B
Date: September 3rd, 2020
QUESTION Which of the following is true with respect to the international and domestic practices of settling trade transactions? A. In an international transaction, a formal promise to pay is required before the buyer can obtain the merchandise. B. In an international transaction, the seller usually ships merchandise on an open account. C. In a […]
Date: September 3rd, 2020
QUESTION For an importer, which of the following is a disadvantage of using a letter of credit for international transactions? A. It results in the importer losing control over the process of trading. B. It reduces the exporter’s level of trust in the importer. C. It reduces the importer’s ability to borrow funds for other […]
Date: September 3rd, 2020
QUESTION Once accepted by the drawee, a time draft becomes a(n): A. asset for the drawee. B. in-transit bill. C. promise to pay by the accepting party. D. bill of lading. E. letter of credit. ANSWER C
Date: September 3rd, 2020
QUESTION Which of the following drafts allows for a delay in payment? A. Sight draft B. Time draft C. Bill of lading D. Counterpurchase E. Offset ANSWER B
Date: September 3rd, 2020
QUESTION When a time draft is presented to a drawee, he or she signifies acceptance of it by: A. delivering the goods immediately. B. paying the draft amount immediately. C. providing a collateral for the amount specified in the bill. D. writing or stamping a notice of acceptance on its face. E. selling the draft […]
Date: September 3rd, 2020
QUESTION In international commerce, the party initiating a draft is known as the: A. maker. B. drawee. C. buyer. D. agent. E. drafter. ANSWER A
Date: September 3rd, 2020
QUESTION Which of the following drafts is payable on presentation to the drawee? A. Bill of lading B. Sight draft C. Letter of credit D. Time draft E. Offset ANSWER B
Date: September 3rd, 2020
