uniit 4 quiz

1. Does the method of international payment - Open Account guarantee payment?

• Yes

• No

1. Who does the bank transfer funds on behalf of in Open Account ?

• The buyer

• The seller

• The import

• The export

Advance payments are recognized as:

• receivable

• payable

• bad debt

• none of these

Which is not the type of advance payments?

• Prepaid bills

• Income tax

• Line of credit

• Arrears billing

1. All of the answers are primary participants of the documentary collection transactions, except:

• 1. Remitting Bank

• Collecting/Presenting Bank

• Drawee

• Retailers

What type of documentary collection does this diagram illustrate?

• Documentary Collection payable on a Sight basis (D/P)

• 1. Documentary Collection payable on an Usance basis (D/A)

1. What is considered the safest payment method in international trade?

• • Advance payment  

• • Documentary credit

• • Documentary collection

• • Open account

1. Who bears the responsibility of opening L/C?

• Exporter

• Importer

• • Exporter’s bank

• • Importer’s bank