In a letter of credit,the most important aspect is
A) the creditworthiness of the importer.
B) the documentation of the transaction.
C) the creditworthiness of the exporter.
D) the promise of eventually changing to an open account.
E) None of the above

Question

Quizplus · Accepted Answer

A letter of credit is being used because the creditworthiness of the importer is already in doubt.The creditworthiness of the exporter is not relevant,nor is any promise or hope of eventually switching to an open account.Rather,the most important aspect of a letter of credit is that all documents be precisely in order so banks in both the exporting and importing countries can properly process them and transfer the appropriate funds.

In a Letter of Credit,the Most Important Aspect Is