Game quizizz

In the Letter of Credit (L/C) payment method, what does the term “Confirmed L/C” mean?

• The L/C has been verified as valid by the issuing bank

• The L/C has a payment commitment from a second bank besides the issuing bank

• The L/C has been accepted and confirmed by the exporter to proceed with the shipment

• The L/C cannot be canceled once issued

In the Collection payment method, if the importer refuses to pay or accept the documents, what can the exporter do?

• Request the collecting bank to issue a new L/C

• Ask the collecting bank to enforce payment from the importer

• Negotiate with the importer or find another buyer

• Switch to the Open Account payment method

In the L/C method, under which condition can the issuing bank refuse to pay the exporter?

• The goods are damaged during transportation

• The importer is dissatisfied with the quality of the goods

• The presented documents contain discrepancies, even minor ones, from the L/C terms

• The importer requests the bank not to make the payment

What is one of the main reasons why importers prefer to use the Open Account payment method?

• It minimizes risks for the exporter

• No payment is required before receiving the goods, optimizing cash flow

• The payment is guaranteed by a bank

• It avoids banking procedures

An exporter from China agrees to sell goods to an importer in Brazil under a D/A (Documents Against Acceptance) 90-day term. The goods are shipped, and the importer accepts the bill of exchange. However, on the due date, the importer refuses to pay, claiming financial difficulties. What options does the exporter have?

• Request the collecting bank to force payment from the importer

• Seize the goods from the importer through legal action

• Sell the bill of exchange to a factoring company at a discount

• Request the issuing bank to enforce payment

An importer in the United States wants to purchase machinery from an exporter in Japan but is concerned about quality issues and delayed shipments. Which payment method would be the best choice to protect the importer's interests while maintaining a reasonable level of security for both parties?

• Open Account

• Letter of Credit (L/C) with an inspection clause before shipment

• Documents Against Payment (D/P)

• Advance Payment

What is the most significant difference between SBLC (Standby Letter of Credit) and Bank Guarantee (BG)?

• The purpose and usage: SBLC is a backup payment mechanism, while BG assures performance or payment.
• SBLC is issued by individuals, while BG is issued only by corporations.
• Both SBLC and BG serve the same purpose in financial transactions.
• SBLC is used for performance assurance, while BG is a backup payment mechanism.

An oil-importing company in India requests its UAE supplier to accept SBLC payable on demand instead of a regular Letter of Credit (L/C). Why would the importer prefer SBLC?

• SBLC optimizes cash flow since payment is only made upon demand by the exporter

• SBLC can replace a commercial contract and ensure timely delivery

• SBLC requires fewer document verification procedures than L/C

• SBLC has fewer legal obligations, making disputes less likely

Which of the following conditions couldn't make an SBLC unenforceable when a beneficiary demands payment?

• The SBLC has expired before the beneficiary submits a demand

• The demand documents do not comply with the SBLC terms

• The issuing bank is bankrupt, and no confirming bank exists

• The demand party has no commercial contract with the SBLC applicant

Among the following international payment methods, which one provides the highest payment security for the exporter but also involves higher costs and strict documentary requirements?

• Open Account

• Collection

• Letter of Credit (L/C)

• Advance Payment