The seller has presented the documents correctly, but the buyer is not paying the draft in a documentary collection (dc) transaction. If payment isn't forthcoming the bank is responsible to:

Question options:

Consult URC522 to determine what to do
Advise the buyer that they must pay within 30 days
Remit payment and debit the buyers account
Advise the buyer and remit payment to the seller

Question 3
When a product is shipped to the buyer without prior payment or without any bank involvement, this is an example of:

Question options:

Documentary collection
Payment in advance
Letter of credit
Open account

Question 4
The importer's country has a quota on your product. As an exporter would you agree on an open account?
Question options:

Yes, if I have confidence that the goods will be imported prior to the end of the quota
No , as control of the quota is governed by international rules
No, as control of quota is by the government and the goods may not qualify
Yes, as I will have, in writing, confirmation from the importer that the goods will qualify

Question 6
Which of the following two terms mean exactly the same thing with respect to documentary collections.
Question options:

Drawer and Drawee
Importer and Drawer
Buyer and Drawer
Seller and Drawer

Question 7
The open account method of payment has the highest risk for which of the following parties?
Question options:

The freight forwarder
The buyer
The seller
The bank

Question 8
What method of payment should an exporter choose when the importer's credit report is doubtful?
Question options:

Advance payment
Open account
Documentary collection

Question 10
A collection letter is prepared. The document only indicates FATE: non acceptance and PROTEST: do not protest. This means the ___________ will ______________.
Question options:

Remitting bank, advise on non-payment
Collecting bank, advise on non-payment
Collecting bank, protest for non-payment

Question 14
A contract using a documentary collection with the term D/P (documents against payment) means that the payment to the seller will ____________ upon presentation of the documents and the draft.
Question options:

be made at maturity
be made in 10 days
not be made at all
be made immediately

Question 15
The main risk for the Exporter/Drawer in a documentary collections transaction that makes “Documents Against Acceptance” riskier than “Documents Against Payment” is
Question options:

Political risk in countries that have restrictions on foreign exchange
Exchange rate risk that the exporter/drawer might face while awaiting payment
There is no added risk for the drawer; it is the drawee who has the higher risk
The drawer must wait until the maturity date for payment even though the buyer has taken possession of the goods

Answer rating: 100% (QA)

D Adv ise the buyer and rem it payment to the seller If the buyer does not pay the draft within the specified time period the bank must advise the buyer and rem it payment to the seller This is becaus... View the full answer