OrStar, an automobile spares manufacturing company, exports its products to Widget Corp. and gets paid by an open account agreement. Given the scenario, which of the following statements is true?

Question

Quizplus · Accepted Answer

CB) An open account agreement, where goods are shipped and delivered before payment is due, can create an unfavorable balance of value for the exporter (OrStar) until payment is received, as it bears the risk of non-payment.C) In an open account transaction, the importer (Widget Corp.) receives the goods before payment is made, effectively making the importer a lender to the exporter (OrStar) until the payment is made.

OrStar, an Automobile Spares Manufacturing Company, Exports Its Products to Widget