Methods of Payment/Assessment

Unit 4.1-Methods of Payment 

Introduction | Cash in Advance | Documentary Collections | Letters of Credit | Open Account | Combining Methods | Summary | Resources | Activities |

Assessment

1

As an exporter requesting Cash against documents for the payment terms on their international transaction. The exporter is not required to include a _____________________ along with the export documents.

shipper’s export declaration
bill of exchange
commercial invoice
packing list

2

A letter of credit reduces credit risk to the exporter by

allowing the exporter to ship any product they have available to the importer once the letter of credit is received.
requiring the importer to pay all of the banking charges for the letter of credit .
allowing the importer to accept more than they ordered and that is identified in the letter of credit.
requiring the importer to pay should the exporter comply exactly with the terms and conditions of the letter of credit.

3

Open account payment terms is the best option for an international transaction

in every situation and in every market.
only when the importer is a new company.
when a long-term relationship has been established.
when the exporter has been doing business for many years.

4

Cash in advance or prepayment provides reduced risk to the

importer
broker
banks
exporter.


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