Payment methods

In Cash in advance, the buyer simply prepays the seller ...... shipment of the goods.

• after

• before

• both of these

• none of these

Open Account provides the least risk for the buyer, and the greatest risk for the seller.

• True

• False

In Open Account, the buyer agrees to pay for the goods within a designated time ....... the shipment, usually in 30, 60, or 90 days.

• after

• before

• both of these

• none of these

If the exporters have unique or high-demand products, or receiving orders from unknown buyers in unstable countries, they should use

• Open Account

• Cash in advance

• Documentary Collections

Letter of credit is a commitment of............... to pay a ................ on behalf of the .............. so long as the seller complies with precisely defined terms and conditions specified in the credit.

• bank, seller, buyer

• bank, buyer, seller

• seller, bank, buyer

• seller, buyer, bank

In documentary credit, the banks only deal with................, not...................

• goods, documents

• documents, goods

• money, documents

• none of these

This payment method is an order by the seller to his bank to collect payment from the buyer in exchange for the transfer of documents that enable the holder to take possession of the goods. What is this payment method?

• Open Account

• Cash in advance

• Documentary Collections

• Documentary Credit (L/C)

In documentary credit, the Applicant is often:

• the buyer

• the seller

• the bank

• all of these

Who requests the bank to issue a letter of credit?

• The importer

• The exporter

• The insurance company

• None of these

Which bank has a commitment to pay the exporter if the exporter complies precisely with the terms and conditions of the letter of credit?

• Remiting bank

• Collecting bank

• Issuing bank

• Advising bank