Importing and Exporting M7: Methods of Payment

Which payment method involves the importer paying only after the goods are sold to the end-user?

• Open Account

• Consignment Sales

• Documentary Collection

• Cash in Advance

Which payment method is considered the riskiest and most time-consuming for the exporter?

• Open Account

• Cash in Advance

• Documentary Collection

• Consignment Sales

In which payment method does the title to the products often move from the seller to the buyer prior to payment?

• Consignment Sales

• Open Account

• Documentary Collection

• Documentary Letter of Credit

Which payment method provides no protection to the seller if they are not paid?

• Consignment Sales

• Open Account

• Documentary Collection

• Cash in Advance

In which payment method is a negotiable instrument confirming the importer's legal commitment to pay not required?

• Documentary Collection

• Consignment Sales

• Open Account

• Documentary Letter of Credit

Which payment method involves the exchange of documents through banks to settle the sale transaction?

• Open Account

• Consignment Sales

• Documentary Collection

• Cash in Advance

In a Documentary Collection, the documents are delivered to the buyer after payment has been made or after the buyer has accepted a bill of exchange. What is this bill of exchange called?

• Letter of Credit

• Documents against Payment

• Documents against Acceptance

• Cash on Delivery

Which payment method is governed by the Uniform Customs and Practice for Documentary Credits (UCPDC)?

• Open Account

• Documentary Letter of Credit

• Cash in Advance

• Consignment Sales

What is the role of the bank in a Documentary Letter of Credit?

• Inspect the goods before payment

• Act as an intermediary and deal only in documentation

• Provide a guarantee for the quality of goods

• Offer a loan to the importer

In which payment method does the importer give payment in advance for the goods before they are shipped?

• Consignment Sales

• Open Account

• Documentary Collection

• Cash in Advance