An Instrument Issued by a Bank, at the Request of an Importer

question 16

Multiple Choice

An instrument issued by a bank, at the request of an importer, in which the bank promises to pay a beneficiary upon presentation of specified documents is a

• A) time certificate of deposit.
• B) time draft.
• C) sight draft.
• D) letter of credit.

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Definitions:

Period Costs

Expenses that are not directly tied to the production process and are instead charged to the periods in which they are incurred, such as sales and administration expenses.

Work in Process Inventory

Work in process inventory consists of goods partially completed, not yet ready for sale, representing the cost of raw materials, labor, and overhead involved in production.

Direct Materials

Raw materials that can be directly attributed to the production of goods.

Direct Labor

The wages and related expenses for employees who are directly involved in the production of goods or services.