Asked by Langle Eunice on May 21, 2024
Verified
Allied Gadgets, an industrial equipment manufacturer, accepts selling terms that are less than favorable in order to secure more business. The company exports its products to a small scale industry (SSI) in Belwick with the terms that the SSI doesn't pay for the goods until after they have been received. The payment method used in this scenario is _____.
A) consignment
B) a commercial letter of credit
C) an open account
D) a documentary collection
Small Scale Industry
A sector comprising of businesses that operate on a small scale, typically characterized by low investment, fewer employees, and less revenue compared to large-scale industries.
Open Account
A form of payment in which an importer doesn’t pay for goods until after they have been received, creating an unfavorable balance of value for the exporter.
Less Favorable
Describes conditions or treatment that are comparatively disadvantageous or inferior to others.
- Understand thoroughly the multiple methods for facilitating payments in international commerce, which encompasses advance cash payments, letters of credit in commerce, documentary collections activity, and operations based on open account agreements.
- Identify the security implications for importers and exporters associated with different payment methods.
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Learning Objectives
- Understand thoroughly the multiple methods for facilitating payments in international commerce, which encompasses advance cash payments, letters of credit in commerce, documentary collections activity, and operations based on open account agreements.
- Identify the security implications for importers and exporters associated with different payment methods.
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