TEST FOR MODULE 10.

1
REQUIREMENTS OF BUYER AND SELLER
Score
1. List for main concern of the buyer and the seller : (24)

a.) The buyer wants (1). ______________________

(2). ______________________
(3). ______________________
(4). ______________________

b.) The seller wants (1). ______________________ (24)

(2). ______________________
(3). ______________________
(4). ______________________

2. State the two reasons why the buyer prefers payments after (24)
Shipment ?

(1). ____________________________________________________

(2). ____________________________________________________

3. Give two reasons why the seller prefers payments before the (28)
Shipments of goods ?

(1). ____________________________________________________

(2). ____________________________________________________
 TEST FOR MODULE 10.2
DOCUMENT CREDIT OPERATION
Score
1. State the three main part of documentary credit operation : (20)

(1). __________________________________________________

(2). __________________________________________________

(3). __________________________________________________

2. Enumerate the four main parties involved in the documentary credit (20)
Operation :

(1). __________________________________________________

(2). __________________________________________________

(3). __________________________________________________

3. Using a few words, list the three steps of the first main part of (20)
Documentary credit operations and indicate the parties involved :

(a) Step 1 : _________________________________________

_________________________________________

(b) Step 2 : _________________________________________

_________________________________________

(c) Step 3 : _________________________________________

_________________________________________
4. Place the activities below in the correct sequence in which they 20
Should be carried out, according to the second part of documentary
Credit operation, by putting a number (1-6) in front of each activity
( 1 = first activity, 2 = second activity and so on )
20
 The nominated bank checks document against credit

 The nominated bank sends the documents to the issuing bank

 The seller sends the documents giving evidence of shipment

To the nominated bank

 The seller receives credit and position to load and dispatch of goods

 The nominated bank : pays, accepts or negotiates to the seller

According to the terms of the credit.

 The issuing bank effect payment to the seller or nominated bank

5. If the statement is true, write true in the blank ; if it is false, substitute

The world in italic by writing the correct word in the space provided.

In the third part of documentary credit operation : 20

(a). The documents are checked by

The confirming bank.
(b). The confirming bank release the
Documents upon payment of the
amount by the buyer.
(c). The buyer sends the transport
Document to the carrier who will
Then proceed to thr deliver the Goods
 TEST FOR MODULE 10.3
TYPES OF DOCUMENTARY CREDIT OPERATION AND SETTLEMENT
Score

1. State the three most commonly used types of Documentary Credit. 15

(1). _________________________________________________________________
(2). _________________________________________________________________
(3). _________________________________________________________________

2. Which of he following statement are correct? (Againts the correct statement, please
45
put a tick (X) inside the box)
a. A revocable credit can be cancelled by the issuing bank on its Own
initiative

b. A revocable credit can be cancelled by the issuing bank on the

instruction of the buyer

c. A revocable credit can be cancelled or amanded by the advising bank

d. An irrevocable confirmed credit can be cancelled or amanded by the

apllicant for credit

e. An irrevocable confirmed credit can be cancelled or amanded by

issuing bank

f. An irrevocable confirmed credit can be cancelled or amanded if all

parties concerned agree

g. An irrevocable uncofirmed credit can be cancelled by the buyer

h. An irrevocable uncofirmed credit can be cancelled by issuing bank

i. An irrevocable uncofirmed credit can be cancelled by the buyer or the

issuing bank

3. State the two advantages of irrevocable confirmed credit to the seller

_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
4. State the main advantage of a revocable credit to the buyer
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
 TEST FOR MODULE 10.4
ANALYSIS OF DOCUMENTARY CREDIT INSTRUCTIONS/DETAILES

1. On receipt of the credit, the beneficiary should check : his name and all names and
addresses, teh points of dispatch, etc.

Indicate below four more items he should check:

i. _______________________________________________________________ (12.5)
ii. _______________________________________________________________ (12.5)
iii. _______________________________________________________________ (12.5)
iv. _______________________________________________________________ (12.5)

2. List the four most common discrepancies :

i. _______________________________________________________________ (12.5)
ii. _______________________________________________________________ (12.5)
iii. _______________________________________________________________ (12.5)
iv. _______________________________________________________________ (12.5)