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WorksheetsLetter of credit - unit I
Total questions: 15
Worksheet time: 8mins
A ____ is a document from a bank guaranteeing that a seller will receive payment in full as long as certain delivery conditions have been met:
Agreement
Letter of Credit
Bill Paper
None of The Above
Letter of Credit is used only for international trading payment operations:
Yes
No
None of The Above
Most Letter of Credit often used in International Trade. Letters of Credit are governed by rules promulgated by the:
International Chamber of Commerce
Uniform Customs and Practice for Documentary Credits
Both of The Above
None of The Above
Letter of Credit is beneficial for which party:
Seller (Exporter)
Buyer (Importer)
Both of The Above
None of The Above
Sellers must trust that the bank issuing the letter of credit is valid, and that the bank will pay as agreed. If sellers have any doubts, they can use a ______letter of credit, which means that another (presumably more trustworthy) bank will guarantee payment:
Confirmed
Irrevocable
Revocable
None of The Above
Letter of Credit are usually issued by:
Banks
Financial Institutions
Both of Above
None of The Above
Which among the following definitions are wrong:
Beneficiary - The company or individual who will receive the payment from buyer.
Issuing Bank - The bank which issues letter of credit to seller party
Advising Bank - (The bank where seller wants receipt of payment)
None of The Above
The bank with which credit is available (to seller) called ______:
Delegated Bank
Nominated Bank
Any Bank
None of The Above
Which is correct about Irrevocable letter of credit:
only allows change or cancellation of the letter of credit by issuing bank with approval by the beneficiary.
All letters of credit governed by the current UCP are irrevocable letter of Credit.
Both of The Above
None of The Above
Letter of Credit can be transferred:
Yes
No
None of The Above
Which type of letter of credit allows issuing bank to change in it without consulting other parties?
Irrevocable LC
Revocable LC
Confirmed LC
Unconfirmed LC
Which LC confirms that payment will be made even if issuing bank fails to pay?
Confirmed LC
Revocable LC
Unconfirmed LC
______ Bank guarantees payment in confirmed LC.
Issuing Bank
Advising Bank
RBI
14.The beneficiary under a letter of credit is
the bank opening the credit.
the customer of the opening bank
the confirming bank.
the exporter.
When a letter of credit does not indicate whether it is revocable or irrevocable, it is treated as
revocable
irrevocable
revocable or irrevocable at the option of the beneficiary.
revocable or irrevocable at the option of the negotiating bank
