When Serving as Collateral,the Bill of Lading

question 19

Multiple Choice

When serving as collateral,the bill of lading

• A)can be used to advance funds to the exporter by its local bank before or during shipment.
• B)specifies that the carrier is obligated to provide a transportation service in return for a certain charge.
• C)can be used to obtain payment or a written promise of payment before the merchandise is released to the importer.
• D)states that the bank will pay a specified sum of money to a beneficiary,normally the exporter,on presentation of particular,specified documents.
• E)is an order written by an exporter instructing an importer,or an importer's agent,to pay a specified amount of money at a specified time.

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Definitions:

Adjusting Entry

Journal entries made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Allowance Method

An accounting technique used to estimate and prepare for the amount of accounts receivable that may not be collected.

Contra Asset Account

An account on a company's balance sheet that reduces the value of a related account, used to account for items like depreciation, amortization, and allowances for doubtful accounts.

Realizable Value

The estimated amount that an asset can be sold for at the end of its useful life, minus any disposal costs.