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)open account
E)bank draft

Question

Quizplus · Accepted Answer

Open account transactions are typically used when there is a strong, long-standing relationship between the exporter and importer. This method allows the importer to pay the exporter within a mutually agreed period after the goods have been shipped, reflecting a high level of trust between the two parties.

Which of the Following Methods of Financing Would Be Used