Because Some of Their Cash Must Be Frozen at the Issuing

question 41

True/False

Because some of their cash must be frozen at the issuing bank to guarantee payment,importers often prefer terms other than those of a letter of credit.

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Definitions:

Legal Fees

Costs incurred for legal services, which can sometimes be deductible on a tax return depending on the nature of the legal issue.

Casualty Loss

A casualty loss is a sudden, unexpected, or unusual loss of property resulting from events like natural disasters, accidents, or theft, which can be deductible under certain conditions for tax purposes.

Non-recognition

A tax principle allowing certain transfers or exchanges of property to occur without immediate tax consequences.

Involuntary Conversion

A forced change of property ownership or destruction, such as through theft or natural disaster, that may have tax implications.