Types of Payments/Assessment

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Globe for WikiEducator.jpg Unit 4.6-Types of Payments 

Introduction | Types | Negotiation | Summary | Resources | Activities | Assessment


1. Letters of credit promise the beneficiary that funds will always be transferred

a. immediately.
b. based on the agreed tenor of the l/c.
c. within 3 – 5 working days.
d. in a reasonable time frame.

2. When funds are transferred 60 days after sight without a draft, this is a(n) ___________ letter of credit.

a. acceptance
b. negotiation
c. deferred payment
d. sight

3. The different types of letters of credit allow the buyer and seller to be

a. risk-free.
b. restricted.
c. limited.
d. flexible.

4. If payment is to be made at negotiation, the funds are paid to the beneficiary by the

a. advising, issuing or confirming bank.
b. issuing bank only.
c. confirming bank only.
d. advising bank only.

(Correct answers: 1=b, 2=c, 3=d, 4=a.)