Mcq International Payments

1. In the case of a â€Å"sight draft† A. the draft acceptance is after the shipment of goods B. the draft is presented to the buyer for acceptance when the shipment has been made C. the risk for the importer consists in the disposal of the unpaid goods D. the goods are available to the buyer before payment 2. It is not a bank draft A. promissory note B. checks C. money orders D. bill of exchange E. documentary collections 3. B/E represents: A. unconditional order in writing to pay a specified amount of money to a specified person or to the bearer, upon presentation of the bill at a specified future date B. n order given to the bank in order to pay a specific amount to a person from the company current account against the presented bill C. an order given by a person to its bank in order to pay a specific amount directly in the beneficiary’s account D. a written promise to pay a determinate sum of money made between two parties 4. This is not a benefit for the importer w hen he use a payment based on the letter of credit: A. reliance on issuing bank’s credit rather than buyer’s B. documentary evidence that the ordered goods have been shipped on time C. payment deferred until goods are shipped and documents presented D. ssurance that necessary clearance documents will be provided 5. A clean L/C means that: A. the L/C can not be revoked without the specific permission of all parties involved, including the exporter B. the L/C is issued by a bank and confirmed by another, obligating both banks to honor drafts drawn in compliance C. the place where the payment is realized by the exporter bank D. the documents are presented without other additional documents or notifications 6. In the case of open account payment A. the goods available to buyers before payment B. the risk belongs to the importerC. the goods are shipped to a buyer with a strong guarantee of payment D. the goods are available to buyers after payment 7. â€Å"Consignment† means that: A. the exporter retains actual title to the goods that are shipped to the importer B. an order given to a bank in order to pay a specific amount to a person from the company current account C. the goods will not be shipped until the buyer has paid the seller D. the goods are shipped to a buyer without guarantee of payment 8. The chief advantage in case of advance payment is: A. no credit extension required B. apital tied up until sales; must establish distributor’s creditworthiness need political risk insurance in some countries; increased risk from currency controls C. if customer does not or cannot accept goods, goods remain at port of entry and no payment is due D. lowers customer resistance by allowing extended payment after receipt of goods 9. The difference between a P-note and B/E consists on: A. the amount of money is well determined B. the maker of a P-note to personally pay the payee rather than ordering a third party to do so C. the P-note is more se cure than a B/E D. he issuer of a P-note is the exporter 10. The highest risk is in case of: A. sight draft B. time draft C. cash in advance D. revocable L/C E. open account 11. International payments A. require common payment procedures B. are always guaranteed by a different bank C. are less risky D. are more complex than local payments 12. Open account payments mean that: A. the exporter retains actual title to the goods that are shipped to the importer B. the goods will not be shipped until the buyer has paid the seller C. the goods are shipped to a buyer without guarantee of payment D. n order given to a bank in order to pay a specific amount to a person from the company current account 13. In the case of a letter of credit this is not an advantage for the exporter A. Reliance on issuing bank’s credit rather than buyer’s B. Payment protection C. Rapid, local source of repayment, if payable at a local bank D. Payment deferred until goods are shipped and documents p resented (use of funds) 14. â€Å"Check† means that A. the exporter retains actual title to the goods that are shipped to the importer B. the goods are shipped to a buyer without guarantee of payment C. n order given to a bank in order to pay a specific amount to a person from the company current account D. the goods will not be shipped until the buyer has paid the seller 15. This is not a problem when we pay using a letter of credit A. Stipulations concerning freight cost are unacceptable B. Price is insufficient due to Interest Rate C. Unexpected quantity of product D. Description of product insufficient or too detailed E. Shipping schedule is not met 16. The Red-Clause Letter of Credit it is used when A. the exporter, as beneficiary, offers its credit as security in order to finance the opening of a second credit B. beneficiary has the right to instruct the paying bank to make credit available to one or more secondary beneficiaries C. the bank on whom the draft is drawn co mmits to pay the face amount at maturity by stamping â€Å"Accepted† across the draft D. in case of an advance payment in favor of an exporter 17. The lowest risk is in case of A. cash in advance B. open account C. sight draft D. revocable letter of credit E. time draft 18. In the case of Documents against Acceptance A. the bank issues a commitment for a stated time period to pay a beneficiary a stated amount of money B. he buyer may only receives the title and other documents after paying for the goods C. the buyer signs a time draft for payment at a later date D. the buyer may receive the title and other documents after signing a time draft promising to pay at a later date 19. In international payments are not used A. payment instruments B. non – cash payments C. cash payments D. balanced payments E. payment techniques 20. Stand-by Letter of Credit is used A. shipping schedule is not met B. stipulations concerning freight cost are unacceptable C. when the export pric e is insufficient due to FX rate changes D. nly if the importer didn’t fulfill it’s obligations E. only if the exporter didn’t fulfill it’s obligations 21. â€Å"Cash in advance† means that A. the goods will not be shipped until the buyer has paid the seller B. the exporter retains actual title to the goods that are shipped to the importer C. an order given to a bank in order to pay a specific amount to a person from the company current account D. the goods are shipped to a buyer without guarantee of payment 22. In the case of Documents against Payment A. the bank issues a commitment for a stated time period to pay a beneficiary a stated amount of money B. he buyer may receive the title and other documents after signing a time draft promising to pay at a later date C. the buyer may only receives the title and other documents after paying for the goods D. the buyer signs a time draft for payment at a later date 23. â€Å"Money order† represen ts A. is a written promise to pay a determinate sum of money made between two parties B. an order given to a bank in order to pay a specific amount to a person from the company current account C. an order given by a person to its bank in order to pay a specific amount directly in the beneficiary’s account D. nconditional order in writing to pay a specified amount of money to a specified person or to the bearer, upon presentation of the bill or at a specified future date 24. It is not a document required in case of a letter of credit A. Bills of Lading B. Income statement C. Commercial Invoice D. Packing List E. Certificate of Origin 25. In the case of a â€Å"time draft† A. the goods are available to the buyer after payment B. the draft is accepted by buyer in the delivery moment of goods C. the time of payment is after the maturity of draft D. the draft acceptance is after the shipment of goods