Which of the following methods of financing would be used if the exporting and importing parties had a strong, long-standing relationship?
A)documentary credit (letter of credit)
B)documentary collection
C)cash in advance
D)sales on open account
E)bank draft

Question

Quizplus · Accepted Answer

Sales on open account would be the best choice in this scenario as it allows for the exporter to ship the goods and invoice the importer after the goods have been received. This method is commonly used when there is an established trust and relationship between the two parties. Both parties may also have a familiarity with each other's financial standing and creditworthiness.

Which of the Following Methods of Financing Would Be Used