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F4 > Documents > Flashcards

Documents Flashcards

1
Q

What is a bill of exchange?

A

is an unconditional order in writing addressed by one person to another signed by the person giving it requiring the person who it is addressed to, to pay on demand or at a specific date a certain sum of money to a specified person

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2
Q

Who is the addresser of a bill of exchange?

A

the drawer

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3
Q

Who is the receiver of a bill of exchange?

A

the drawee typically the drawers bank

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4
Q

Who is a bill of exchange paid to?

A

the payee

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5
Q

What is a bearer bill?

A

a bill of exchange that is blank in the name of the payee so person in possession can claim it

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6
Q

Who is an acceptor?

A

the drawee that accepts the bill usually the drawers bank

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7
Q

What is an indorser?

A

person who bill is paid to, who then uses it to pay own creditor

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8
Q

What is an indorsee?

A

payees creditor who bill has been passed to, to pay off debt

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9
Q

What is a guarantor?

A

person who assures the payment will be made, if it fails they take responsibility to make payment

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10
Q

What are the 5 important addresses that need to be on international bill of exchange?

A

1) place where bill is drawn
2) place where drawer signed
3) place next to drawee’s name (where they live)
4) place next to payee’s name (where they live)
5) place where it is to be paid

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11
Q

To qualify for international bill of exchange what is needed?

A

at least 2 of the addresses need to be in different states and needs to state INTERNATIONAL bill of exchange

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12
Q

How can a bearer bill be voided?

A

When payee requests for payment from drawer, drawer can decline as he has been advised to by person he was meant to pay

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13
Q

If bearer bill is voided who is liable

A

all prior parties who signed for the bill including the person who passed it to the last party

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14
Q

What is a bill of lading?

A

document given from carrier to seller confirming they have received goods which have been placed on a particular vessel to be taken to a particular destination

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15
Q

What is a negotiable bill of lading?

A

is made in favour of the seller, so carrier holds goods on behalf of seller, who then presents bill to bank for payment

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16
Q

What is a non-negotiable bill of lading?

A

made in favour of the buyer so payment cant be collect until it is made

17
Q

What type of bill is only non-negotiable?

A

airway bill

18
Q

What is an inland bill?

A

contract of carriage overland to international departure point through land only (up to shipping point)

19
Q

What is an ocean bill?

A

contract from port in seller state to specified port in other state?

20
Q

What is a through bill?

A

contract which combines both inland and ocean transport

21
Q

What is a airway bill?

A

contract of carriage by air, can be domestic and international

22
Q

What is a letter of credit?

A

is a way seller can receive payment immediately but buyer still has credit period (like a credit card) but should be arranged before entering into contract

23
Q

What is a confirmed letter of credit?

A

where buyer instructs their bank to give letter of credit to sellers bank, who then pay seller after proof of delivery. once seller is paid, SB requests money from BB who then pay. BB then requests money from buyer who pays

24
Q

What is a unconfirmed letter of credit?

A

where the sellers bank doesn’t guarantee the seller will be paid

25
Q

What is a revocable letter of credit?

A

is where buyer can change details without notifying the seller

26
Q

What is a irrevocable letter of credit?

A

buyer cant make change in details without notifying the seller first

27
Q

What is a letter of comfort?

A

document that is intended to assure the recipient that a financial or contractual obligation with another party can and will be met

28
Q

Who usually writes the letter of comfort?

A

usually the parent/holding company

29
Q

What is the difference between letter of comfort and letter of credit?

A

letter of comfort does not include liability to pay subsidiary’s debt

F4 (14 decks)

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