Which of the Following Is True About Documentary Collection or Draft

question 37

Multiple Choice

Which of the following is true about documentary collection or draft as a method of payment?

• A) It is an internationally recognized letter issued by a bank on behalf of its client, the purchaser.
• B) It represents the bank's guarantee to pay the seller, provided that the conditions specified in the letter are fulfilled.
• C) It is the ideal method of payment because a company has immediate use of the money.
• D) It involves wire transfers or the acceptance of credit cards.
• E) It requires the buyer to pay the face amount either on sight or on a specified date in the future.

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Definitions:

Principal

The primary party involved in a contractual agreement or the original amount of money lent or invested before interest.

Agent

An individual or entity authorized to act on behalf of another person or entity in dealings with third parties.

Principal Negotiator

identifies a person who has the primary responsibility for conducting negotiations, often on behalf of an organization or government.

Troubleshooter

describes someone skilled in solving problems or fixing complex issues, often in technical or organizational contexts.