IIP301 - QUIZ 2 (CH8-9-10) WITH 100% CORRECT ANSWERS.

1. In most case, a draft accepted by bank enjoys ______________ credit standing than a draft accepted by a company and individual. A. Higher B. Lower C. None of the above A 2. The draft with tenor "45 days after shipment date (shipment date: 15 June 2019) is called: A. Time draft B. Sight draft C. Usance draft D. Both A and C are correct D 3. Which is the internationally recognized of rules unifying banking practice regarding collection operations for drafts and for documentary collections? A. URC522 B. URC600 C. UCP600 D. All of the above A 4. Rosemary Co Ltd is a Germany exporter and they submits the collection documents to his bank (Claring Bank JSC) with a collection order for payment from the buyer Jian Co., Ltd in Hongkong. In this case, who is the principal? A. Rosemary Co Ltd B. Claring Bank JSC C. Jian Co.,Ltd D. Both Rosemary Co Ltd and Jian Co.Ltd A 5. In D/A terms, the buyer may accept the draft, take possession of the goods, but then refuse to pay the draft at maturity. A. True B. False A 6. The seller is now doing a Collection transaction under URC522 at his bank. He presents the documents to the bank and insists that the bank is under obligation to authenticate his documents. Do you agree with the seller? A. Yes B. No B 7. In collection transaction, the seller must prepare ________________ in which specifies the terms and conditions of the documentary collection. The banks are only permitted to act upon the instructions given in this to handle the transaction. A. Certificate of origin B. Bill of exchange C. Collection order D. Commercial invoice C 8. According to URC 522, if a collection remains unpaid or a bill of exchange is not accepted, may the collecting bank return the documents to the bank from which it received the collection order? A. No B. Yes for all cases C. Yes, but only in the case the collecting bank receives no new instruction within 90 days D. Yes, but only in the case the collecting bank receives no new instruction within 180 days C 9. The URC are applied worldwide but it is not mandatory that a collection instruction incorporate these rules A. True B. False A 10. If URC is incorporated into the Collection instruction, it overides law A. True B. False B 11. According to URC 522, banks are not bound to handle any collection instruction. They can refuse to handle collection on a case-by-case basis A. True B. False A 12. In a documentary collection transaction, the banks must examine the documents in detail to ensure that such docments are complied with terms and conditions in the sale contract A. True B. False B 13. Banks receiving collections must determine that the documents received appear to be listed in the collection instruction A. Always B. When requested C. Never A 14. Under a sight documentary collection, for what reason is the buyer exposed to only minimal risk? A. Because it need only pay when it has received and review the original shipping documents B. Becuase it need only pay when it has reviewed the original shipping documents at the counters of the collecting bank C. Becuase it need only pay when it has review the original shipping documents at the counters of the remitting bank A 15. Under documentary credit, complying presentation means a presentation that is A. Within LC validity only B. Presenting of all shipping documents C. In accordance with LC terms & conditions C 16. If the beneficiary is not happy with the term & conditions of L/C, he can ask applicant for A. Fresh letter of credit (replacement) B. An amendment C. Applicant confirmation B 17. Issuing bank is bound by a letter of credit___________ A. From the time of issue LC B. From the time the LC is advised by the advising bank C. From the time LC is received by the beneficiary A 18. An irrevocable credit can neither be amended not cancelled without the agreement of the following parties A. The issuing bank & the confirming bank B. The confirming bank & the beneficiary C. The issuing bank, the beneficiary and the confirming bank (if any) C 19. In the context of a documentary credit, the "opening" Bank is also called the? A. Issuing bank B. Advising bank C. Confirming bank D. Nominated bank A 20. UCP 600 cover the inssuance for revocable credits. Is this statement True or False? A. True B. False B 21. When is an issuining bank irrevocably bound by an amendment? A. When it approves the request of the applicant B. When it issues the amendment C. When the advising bank or confirming bank advises the amendment D. When the beneficiary receives the amendment B