Which of the following statements holds true for an open account?
A)It is an arrangement in which the exporter ships the goods and then bills the importer.
B)It is an arrangement in which an exporter is paid immediately on receipt of the bill of exchange.
C)It is an arrangement in which an exporter sells a time draft at a discount to an intermediary that will pay the exporter immediately and then collect the full amount from the importer at the later date.
D)It is an arrangement in which the exporter is paid exactly one year after the delivery has been made to the importer.
E)It is an arrangement in which the exporter requires payment from the importer before shipping the goods.

Question

Quizplus · Accepted Answer

An open account transaction is one where the goods are shipped and delivered before payment is due, typically allowing the importer a set period of time (e.g., 30, 60, 90 days) to pay the exporter after the goods have been received. This arrangement is beneficial in building trust and competitiveness but poses a higher risk to the exporter.

Which of the Following Statements Holds True for an Open