When is a letter of credit made transferable?
AWhen the beneficiary is a middleman
BWhen the buyer is a bank
CWhen the goods are perishable
DWhen payment is at sight
Answer & Solution
Correct answer: A. When the beneficiary is a middleman
Credits are made transferable when the beneficiary is a middleman who procures goods or documents from other suppliers.
Keep practising International Working Capital Management
Browse all International Working Capital Management questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
In a multilateral net settlement system, how does each participant settle?What is the primary objective of netting in financial markets?When does close-out netting normally operate?What does positive pay reduce?What does a lockbox service help a company do?Which bank service moves surplus balances into a money market fund overnight?Which technique converts debtors to cash in short-term financing?Which firm policy directly affects the cash conversion cycle by governing sales on credit?