Letter of Credit (LC) Quiz

Types of Letter of Credit (LC) that cannot be changed are:

• Revocable LC

• Irrevocable LC

• Transferable LC

• Back to Back LC

What is a Letter of Credit (LC)?

• A document that ensures payment by the buyer to the seller.

• A document that ensures the delivery of goods by the seller to the buyer.

• A document that ensures the quality of goods delivered by the seller.

• A document that confirms the price of the goods delivered by the seller.

Documents that must be presented by the seller to obtain payment via Letter of Credit (LC) are:

• Commercial invoice

• Bill of Lading

• Packing list

• All those listed above

LC is divided into... categories

• 2

• 3

• 4

• 5

The main parties involved in L/C are:

• Importers, exporters, and issuing banks.

• Importers, exporters, and advising banks.

• Importers, exporters, issuing banks, and advising banks.

• Importers, exporters, issuing banks, advising banks, and third parties.

Who is the applicant in a letter of credit transaction?

• Importer

• Issuing Bank

• Exporter

• Advising Bank

The main functions of Letter of Credit (LC) are:

• Assist the seller in arranging the shipment of goods.

• Assist the buyer in ensuring the quality of the goods shipped.

• Assist the seller in ensuring payment by the buyer.

• Assist the buyer in ensuring proper delivery of goods.

Who is the beneficiary in a letter of credit transaction?

• Buyer

• Seller

• Issuing bank

• Confirming bank