A ________ is a document that is issued by a bank on behalf of a buyer who purchases goods on credit from a seller that guarantees that if the buyer does not pay for the goods, then the bank will pay the seller.
A) remittance advice
B) certified check
C) cashier's check
D) letter of credit

Question

Quizplus · Accepted Answer

A letter of credit is a document issued by a bank on behalf of a buyer that guarantees payment to the seller if the buyer does not pay. It is often used in international trade to reduce risk for both parties involved. A remittance advice is a document that accompanies a payment and provides details of the payment. A certified check and a cashier's check are both types of checks that provide guaranteed payment, but they are not specifically used in the context of purchasing goods on credit.

A ________ Is a Document That Is Issued by a Bank