When Collecting for the Sale of Foreign Goods,a Small Business

question 67

Multiple Choice

When collecting for the sale of foreign goods,a small business will use a ________,an agreement between their bank and the foreign buyer's bank that guarantees payment.

• A)bank draft
• B)foreign sales agreement
• C)tariff voucher
• D)letter of credit

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Definitions:

Installment Payments

Payments made regularly over a period of time to settle a debt or purchase, often including interest charges.

Convertible Bonds

Bonds that can be converted into a predetermined number of shares of the issuing company's equity at certain times during their life, usually at the discretion of the bondholder.

Bond Redemption

The process whereby a bond issuer returns the bond's principal value to the bondholder, effectively terminating the bond at or before its maturity.

Carrying Value

Carrying Value is the book value of an asset or liability on a company's balance sheet, calculated as the original cost minus depreciation, amortization, or impairment costs.