Documentary credit is undertaken on behalf of buyer to pay seller amount specified in the credit provided that:

the seller complies with terms and conditions established in the credit.

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Documentary Credit for Pilar (Smita)

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documentary credit

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Questions 10

Answers

1
Amendment is process whereby terms & conditions of documentary credit may be modified after credit has been issued.
False
True
2
The main parties to a basic documentary letter of credit transaction are:
Buyer, Seller and their Banks
Buyer (Applicant/Importer) and Issuing (Buyer's) Bank
Advising (Seller's) Bank and Seller(Beneficiary/Exporter):
Only Buyer´s and Sellor´s Banks
3
Documentary credits provide a high level of protection and security to
both buyers and sellers
None of them
buyers
sellers
4
Advantages for exporter and importer of documentary credit are:
it allows to expand safely business internationally
it works as a credit certificate for buyer
all of these
Seller is free of credit risk
5
Documentary credit is undertaken on behalf of buyer to pay seller amount specified in the credit provided that:
All of these
the seller complies with terms and conditions established in the credit.
the buyer complies with terms and conditions established in the credit.
the bank complies with terms and conditions established in the credit.
6
The documentary credit is an .................. agreement.
dependent on importer´s available balance in the bank
none of these
irrevocable
revocable
7
Settlement: describes the different ways in which ................ may be effected to seller from buyer through banks.
credit
investment
payment
None of these
8
Not all business investments involve financial risk.
False
True
9
The bank's commitment to honour is not subject to comercial claims by......
by the exporter
by the banks
by the importer
by both of them
10
Some disadvantages for exporter and importer of documentary credit are:
all of these
Additional cost – of Bank fee
Time-consuming formalities
Currency risk

Documentary Credit for Pilar (Smita) Flashcards | StudBud

Documentary Credit for Pilar (Smita)

10 termsStudBud Administration124 plays

documentary credit

Flashcards10 cardsFPractice quizPHost liveL

Questions 10

Answers

1
Amendment is process whereby terms & conditions of documentary credit may be modified after credit has been issued.
False
True
2
The main parties to a basic documentary letter of credit transaction are:
Buyer, Seller and their Banks
Buyer (Applicant/Importer) and Issuing (Buyer's) Bank
Advising (Seller's) Bank and Seller(Beneficiary/Exporter):
Only Buyer´s and Sellor´s Banks
3
Documentary credits provide a high level of protection and security to
both buyers and sellers
None of them
buyers
sellers
4
Advantages for exporter and importer of documentary credit are:
it allows to expand safely business internationally
it works as a credit certificate for buyer
all of these
Seller is free of credit risk
5
Documentary credit is undertaken on behalf of buyer to pay seller amount specified in the credit provided that:
All of these
the seller complies with terms and conditions established in the credit.
the buyer complies with terms and conditions established in the credit.
the bank complies with terms and conditions established in the credit.
6
The documentary credit is an .................. agreement.
dependent on importer´s available balance in the bank
none of these
irrevocable
revocable
7
Settlement: describes the different ways in which ................ may be effected to seller from buyer through banks.
credit
investment
payment
None of these
8
Not all business investments involve financial risk.
False
True
9
The bank's commitment to honour is not subject to comercial claims by......
by the exporter
by the banks
by the importer
by both of them
10
Some disadvantages for exporter and importer of documentary credit are:
all of these
Additional cost – of Bank fee
Time-consuming formalities
Currency risk