Consider a Bank That Acknowledges That It Will Make Payments

question 28

Multiple Choice

Consider a bank that acknowledges that it will make payments on behalf of a beer importer after the beer is delivered to the importer.  This reflects:

• A) accounts receivable financing.
• B) forfaiting.
• C) factoring.
• D) a letter of credit.

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Definitions:

Voidable

A legal term describing a contract or transaction that may be declared invalid by one of the parties to the contract.

Minor's Option

The legal ability of a minor to affirm or void contracts and agreements, based on their lack of legal capacity to enter into contracts.

Deposit

An upfront payment or security placed in trust or as a guarantee for the fulfillment of an obligation or purchase.

Majority

More than half of a particular group or amount; often referring to the greater part of a specific population or quantity.