Consideration Is Not Required to Establish or Modify a Letter

question 3

True/False

Consideration is not required to establish or modify a letter of credit.

---

Definitions:

Current Liabilities

Financial commitments that need to be settled within a year or during the regular operation period of a company.

Current Assets

Assets that a company expects to convert into cash, sell, or consume within one year or its operating cycle, whichever is longer.

Closing

The process of finalizing accounts at the end of an accounting period, transferring temporary account balances to permanent ones.

Zeros Out

The process of adjusting an account balance to zero, often used in the context of budgeting or closing temporary accounts at the end of an accounting period.