The multiple choice for L/C 2
Posted: Sun Jul 14, 2019 3:58 pm
Dear Experts,
Pls give your answer and short explaination. Thank you so much!!!
1. Extract from a LC:
Amount: Approx US$ 10,000
Latest shipment date: On or about 15 April XXXX
Tenor: 10 days after B/L date
You are given the following information:
Drawing Amount: US$ 10,700
B/L on board date: 09 April XXXX
Which of the following statements are FALSE?
I. The draft is due on 20 April XXXX
II. Shipment was not made as per LC terms
III. The bill of exchange needs to state tenor only as “10 days after B/L date”
IV. The drawing amount is greater than the amount allowable under the credit
Options:
A. I and II
B. III and IV
C. I, II and III
D. I, III and IV
2. A credit which does not require presentation of a draft is payable at 30 days sight and is available with
the issuing bank. This credit can be made available by:
I. Acceptance
II. Payment
III. Negotiation
IV. Deferred Payment
Options:
A. I only
B. IV only
C. I and IV
D. I, II and III
3. Extract from a LC:
LC issue date: 01 July
Partial shipments: Not allowed
Tenor: Sight
Drawee: Issuing Bank
Presentation period: 21 days
Shipment schedule: July – 1800 Kgs, August – 2,000 Kgs, September 3,000 Kgs, October 3,000 Kgs
The beneficiary shipped goods and presented documents as follows:
Set No. Kgs Shipment Date Presentation Date Doc Paid on
I 1800 15 July 30 July 04 August
II 3000 15 August 28 August 02 Sept
III 1200 31 August 15 September 18 Sept
IV 3100 15 October 30 October 02 Nov
Which of the above sets of documents complied with credit terms? (In case of non compliance with
Article 32, assume that issuing bank has sent a message reinstating the credit when payment was
effected)
Options
A. I only
B. III only
C. I and IV
D. I, II and IV
4. An applicant has given its counter indemnity to its bank in connection with the issuance of a delivery
order. Which of the following inclusions in the indemnity will NOT be acceptable?
A. The applicant will indemnify the bank against all actions, damages and costs
B. The applicant undertakes to accept the underlying documents irrespective of any discrepancies
C. Gives the issuing bank authority to debit its account for the full value only if the inspection team
states that the goods are of good quality
D. Undertakes that if the goods form part of a large consignment it will accept that consignment and
pay the full value
5. Extract from a LC:
Issue Date: 15 February
Amount: US$ 10,000
Issuing Bank: ABC Bank
Confirming Bank: LMN Bank
Beneficiary: PQR Ltd
On 18 February, LMN Bank receives an amendment reducing the amount to US$ 8,000. LMN Bank
advised the amendment to PQR Ltd. What is the liability of the banks at the time of advising the
amendment?
Options
A. ABC Bank – US$ 10,000 & LMN Bank – Nil
B. ABC Bank – US$ 8,000 & LMN Bank – US$ 8,000
C. ABC Bank – US$ 8,000 & LMN Bank – US$ 10,000
D. ABC Bank – US$ 10,000 & LMN Bank – US$ 10,000
6. Which of the following presentations are ACCEPTABLE under this LC?
Extract from the LC:
Amount: US$ 75,000
Goods: Glacial Acetic acid – 40,000 litres
Partial shipments: Not Allowed (see additional condition)
Latest shipment date: From 02 March to 22 March
Shipment to be effected by rail
Additional condition: Goods to be shipped in four separate lots of 10,000 litres each
I. Docs presented for US$ 72,000 which included four sets of railway bills:
RWB 1: Issue date 21 March, Train No. 456, Wagon 30 covering 10800 litres
RWB 2: Issue date 21 March, Train No. 456, Wagon 31 covering 10700 litres
RWB 3: Issue date 03 March, Train No. 459, Wagon 7 covering 9700 litres
RWB 4: Issue date 03 March, Train No. 459, Wagon 8 covering 10000 litres
II. Docs presented for US$ 75,000 which included four sets of railway bills:
RWB 1: Issue date 02 March, Train No. 456, Wagon 30 covering 9500 litres
RWB 2: Issue date 03 March, Train No. 456, Wagon 30 covering 9600 litres
RWB 3: Issue date 04 March, Train No. 456, Wagon 30 covering 9900 litres
RWB 4: Issue date 05 March, Train No. 456, Wagon 30 covering 10450 litres
III. Docs presented for US$ 73,000 which included four sets of railway bills:
RWB 1: Issue date 22 March, Train No. 459, Wagon 30 covering 9500 litres
RWB 2: Issue date 22 March, Train No. 459, Wagon 30 covering 10500 litres
RWB 3: Issue date 22 March, Train No. 459, Wagon 30 covering 10300 litres
RWB 4: Issue date 22 March, Train No. 459, Wagon 30 covering 9900 litres
IV. Docs presented for US$ 73,200 which included four sets of railway bills:
RWB 1: Issue date 16 March, Train No. 459, Wagon 30 covering 9900 litres
RWB 2: Issue date 18 March, Train No. 500, Wagon 31 covering 10600 litres
RWB 3: Issue date 20 March, Train No. 501, Wagon 32 covering 9400 litres
RWB 4: Issue date 21 March, Train No. 501, Wagon 32 covering 11000 litres
Options
A. I and II
B. II and III
C. I and III
D. III and IV
7. You have received a request from the nominated bank (of a LC issued by you) seeking your approval to
negotiate discrepant documents. You contact the applicant and the applicant waives the discrepancies
highlighted by the nominated bank. What are the implications for the applicant?
I. The applicant has committed to accepting all discrepancies in the documents
II. On receipt of documents, the applicant must waive any additional discrepancies referred to it by
the issuing bank
III. The applicant can request for issuance of a shipping guarantee and clear the goods without
providing any indemnity to accept discrepant documents
IV. The applicant commits to accepting the referred discrepancies upon receipt of the documents
Options
A. I and III
B. II and III
C. III and IV
D. IV only
8. Which of the following presentations are ACCEPTABLE under a credit that requires an insurance
document for 110% of the value of the goods?
I. Gross invoice value – GBP 150,000, CIF value of the goods – GBP 125,000, Draft amount – GBP
150,000, Insurance certificate for GBP 137,500
II. CIF Invoice value – GBP 100,000, Insurance cover note issued by a broker for GBP 110,000
III. Invoice value – GBP 100,000, Draft amount – GBP 95,000, Insurance certificate for GBP 104,500
IV. Invoice value – GBP 50,000. One insurance policy issued by ABC Insurance Company for GBP
30,000 covering “customary risks” and another insurance policy issued by ABC Insurance
Company for GBP 25,000 covering “usual risks”
Options
A. I only
B. I and IV
C. II and III
D. III and IV
9. Which of the following is TRUE when presentation is made to the nominated bank?
A. Notice of refusal need not be given
B. Notice of refusal must be given by telecommunication only
C. Oral notice of refusal must not be given if the beneficiary is in discussion with the document checker
at the counters of the bank
D. Oral notice of refusal may not be given even if the beneficiary is in discussion with the document
checker at the counters of the bank as it is disallowed by UCP 600
Pls give your answer and short explaination. Thank you so much!!!
1. Extract from a LC:
Amount: Approx US$ 10,000
Latest shipment date: On or about 15 April XXXX
Tenor: 10 days after B/L date
You are given the following information:
Drawing Amount: US$ 10,700
B/L on board date: 09 April XXXX
Which of the following statements are FALSE?
I. The draft is due on 20 April XXXX
II. Shipment was not made as per LC terms
III. The bill of exchange needs to state tenor only as “10 days after B/L date”
IV. The drawing amount is greater than the amount allowable under the credit
Options:
A. I and II
B. III and IV
C. I, II and III
D. I, III and IV
2. A credit which does not require presentation of a draft is payable at 30 days sight and is available with
the issuing bank. This credit can be made available by:
I. Acceptance
II. Payment
III. Negotiation
IV. Deferred Payment
Options:
A. I only
B. IV only
C. I and IV
D. I, II and III
3. Extract from a LC:
LC issue date: 01 July
Partial shipments: Not allowed
Tenor: Sight
Drawee: Issuing Bank
Presentation period: 21 days
Shipment schedule: July – 1800 Kgs, August – 2,000 Kgs, September 3,000 Kgs, October 3,000 Kgs
The beneficiary shipped goods and presented documents as follows:
Set No. Kgs Shipment Date Presentation Date Doc Paid on
I 1800 15 July 30 July 04 August
II 3000 15 August 28 August 02 Sept
III 1200 31 August 15 September 18 Sept
IV 3100 15 October 30 October 02 Nov
Which of the above sets of documents complied with credit terms? (In case of non compliance with
Article 32, assume that issuing bank has sent a message reinstating the credit when payment was
effected)
Options
A. I only
B. III only
C. I and IV
D. I, II and IV
4. An applicant has given its counter indemnity to its bank in connection with the issuance of a delivery
order. Which of the following inclusions in the indemnity will NOT be acceptable?
A. The applicant will indemnify the bank against all actions, damages and costs
B. The applicant undertakes to accept the underlying documents irrespective of any discrepancies
C. Gives the issuing bank authority to debit its account for the full value only if the inspection team
states that the goods are of good quality
D. Undertakes that if the goods form part of a large consignment it will accept that consignment and
pay the full value
5. Extract from a LC:
Issue Date: 15 February
Amount: US$ 10,000
Issuing Bank: ABC Bank
Confirming Bank: LMN Bank
Beneficiary: PQR Ltd
On 18 February, LMN Bank receives an amendment reducing the amount to US$ 8,000. LMN Bank
advised the amendment to PQR Ltd. What is the liability of the banks at the time of advising the
amendment?
Options
A. ABC Bank – US$ 10,000 & LMN Bank – Nil
B. ABC Bank – US$ 8,000 & LMN Bank – US$ 8,000
C. ABC Bank – US$ 8,000 & LMN Bank – US$ 10,000
D. ABC Bank – US$ 10,000 & LMN Bank – US$ 10,000
6. Which of the following presentations are ACCEPTABLE under this LC?
Extract from the LC:
Amount: US$ 75,000
Goods: Glacial Acetic acid – 40,000 litres
Partial shipments: Not Allowed (see additional condition)
Latest shipment date: From 02 March to 22 March
Shipment to be effected by rail
Additional condition: Goods to be shipped in four separate lots of 10,000 litres each
I. Docs presented for US$ 72,000 which included four sets of railway bills:
RWB 1: Issue date 21 March, Train No. 456, Wagon 30 covering 10800 litres
RWB 2: Issue date 21 March, Train No. 456, Wagon 31 covering 10700 litres
RWB 3: Issue date 03 March, Train No. 459, Wagon 7 covering 9700 litres
RWB 4: Issue date 03 March, Train No. 459, Wagon 8 covering 10000 litres
II. Docs presented for US$ 75,000 which included four sets of railway bills:
RWB 1: Issue date 02 March, Train No. 456, Wagon 30 covering 9500 litres
RWB 2: Issue date 03 March, Train No. 456, Wagon 30 covering 9600 litres
RWB 3: Issue date 04 March, Train No. 456, Wagon 30 covering 9900 litres
RWB 4: Issue date 05 March, Train No. 456, Wagon 30 covering 10450 litres
III. Docs presented for US$ 73,000 which included four sets of railway bills:
RWB 1: Issue date 22 March, Train No. 459, Wagon 30 covering 9500 litres
RWB 2: Issue date 22 March, Train No. 459, Wagon 30 covering 10500 litres
RWB 3: Issue date 22 March, Train No. 459, Wagon 30 covering 10300 litres
RWB 4: Issue date 22 March, Train No. 459, Wagon 30 covering 9900 litres
IV. Docs presented for US$ 73,200 which included four sets of railway bills:
RWB 1: Issue date 16 March, Train No. 459, Wagon 30 covering 9900 litres
RWB 2: Issue date 18 March, Train No. 500, Wagon 31 covering 10600 litres
RWB 3: Issue date 20 March, Train No. 501, Wagon 32 covering 9400 litres
RWB 4: Issue date 21 March, Train No. 501, Wagon 32 covering 11000 litres
Options
A. I and II
B. II and III
C. I and III
D. III and IV
7. You have received a request from the nominated bank (of a LC issued by you) seeking your approval to
negotiate discrepant documents. You contact the applicant and the applicant waives the discrepancies
highlighted by the nominated bank. What are the implications for the applicant?
I. The applicant has committed to accepting all discrepancies in the documents
II. On receipt of documents, the applicant must waive any additional discrepancies referred to it by
the issuing bank
III. The applicant can request for issuance of a shipping guarantee and clear the goods without
providing any indemnity to accept discrepant documents
IV. The applicant commits to accepting the referred discrepancies upon receipt of the documents
Options
A. I and III
B. II and III
C. III and IV
D. IV only
8. Which of the following presentations are ACCEPTABLE under a credit that requires an insurance
document for 110% of the value of the goods?
I. Gross invoice value – GBP 150,000, CIF value of the goods – GBP 125,000, Draft amount – GBP
150,000, Insurance certificate for GBP 137,500
II. CIF Invoice value – GBP 100,000, Insurance cover note issued by a broker for GBP 110,000
III. Invoice value – GBP 100,000, Draft amount – GBP 95,000, Insurance certificate for GBP 104,500
IV. Invoice value – GBP 50,000. One insurance policy issued by ABC Insurance Company for GBP
30,000 covering “customary risks” and another insurance policy issued by ABC Insurance
Company for GBP 25,000 covering “usual risks”
Options
A. I only
B. I and IV
C. II and III
D. III and IV
9. Which of the following is TRUE when presentation is made to the nominated bank?
A. Notice of refusal need not be given
B. Notice of refusal must be given by telecommunication only
C. Oral notice of refusal must not be given if the beneficiary is in discussion with the document checker
at the counters of the bank
D. Oral notice of refusal may not be given even if the beneficiary is in discussion with the document
checker at the counters of the bank as it is disallowed by UCP 600