This article is written by Kazi Suhel Tanvir Mahmud, a trade finance specialist focused on letters of credit, UCP 600, and international trade payment mechanisms.
 |
| MCQ on UCPDC 600 | multiple choice questions on letter of credit | |
MCQ on UCPDC 600 | Multiple Choice Questions on letter of credit
 |
Trade Finance & Letter of Credit Specialist
Inco-Terms – Trade Finance Insights
Inco-Terms – Trade Finance Insights
Kazi Suhel Tanvir Mahmud is a trade finance specialist with over 24 years of banking experience including 17 years specializing in trade finance, letters of credit, shipping documentation, and international trade complianc, sanctions screening, OFAC risk controls, and regulatory conflict management under UCP 600. His insights on finance and trade have been featured in respected publications including CFO Drive, Financial Tech Times and Featured.com.
Let's begin building your CDCS Master Question Bank. Below is Part 1: Questions 1–25, written as original, advanced CDCS-style practice questions suitable for professional study. Each question includes the correct answer, explanation, and relevant UCP 600 references where appropriate.
CDCS® MASTER QUESTION BANK (2026 EDITION)
Part 1 – Questions 1–25
For Part 2 please visit: CDCS Master Question Bank: 500 Advanced Practice Questions on Documentary Credits (UCP 600 & ISBP 821)
UCP 600 Fundamentals & Document Examination
Question 1
A documentary credit requires a "signed commercial invoice." The beneficiary presents an invoice bearing only a printed company name with no handwritten, electronic, or other identifiable signature. What is the most appropriate conclusion?
A. The invoice complies because invoices never require signatures.
B. The invoice is discrepant because the credit specifically requires it to be signed.
C. The invoice complies if the amount is correct.
D. The issuing bank should seek the applicant's approval before deciding.
Answer: B
Explanation: UCP 600 does not generally require invoices to be signed unless the credit specifically requires a signature. Where the credit calls for a signed invoice, the absence of a signature is a discrepancy.
Reference: UCP 600 Articles 18 and 14.
Question 2
A credit is available by negotiation with any bank. A nominated bank negotiates complying documents. Before reimbursement is received, the issuing bank becomes insolvent. Who bears the primary payment risk?
A. Beneficiary
B. Applicant
C. Negotiating Bank
D. Advising Bank
Answer: C
Explanation: A nominated bank that negotiates without adding its confirmation assumes the issuing bank's credit risk.
Question 3
Under UCP 600, banks examine documents on the basis of:
A. The underlying sales contract.
B. Customs regulations.
C. The documents alone.
D. The applicant's commercial intentions.
Answer: C
Reference: UCP 600 Article 5.
Question 4
Which statement best reflects the independence principle?
A. Banks determine whether goods conform to the sales contract.
B. Documentary credits are independent of the underlying contract.
C. Payment depends on buyer satisfaction.
D. Banks investigate product quality before honouring.
Answer: B
Reference: UCP 600 Articles 4 and 5.
Question 5
A commercial invoice describes the goods as "Steel Bolts Type A100." The bill of lading states "Steel Bolts A100." The credit requires "Steel Bolts Type A100." What is the correct conclusion?
A. Discrepant because wording is not identical.
B. Complying because the descriptions do not conflict.
C. Discrepant because every word must match.
D. Refer to the applicant.
Answer: B
Explanation: Data need not be identical but must not conflict.
Reference: UCP 600 Article 14(d).
Question 6
Presentation is made on the fifth banking day after receipt. The issuing bank sends a refusal notice on the sixth banking day. Which statement is correct?
A. Refusal is timely.
B. Refusal is ineffective because notice was late.
C. The bank has ten banking days.
D. Refusal depends on applicant approval.
Answer: B
Reference: UCP 600 Article 16.
Question 7
A bill of lading contains the notation "Packaging torn on two cartons." How should the document be treated?
A. Clean.
B. Claused.
C. Acceptable if freight is prepaid.
D. Acceptable if signed again by the carrier.
Answer: B
Question 8
A credit prohibits partial shipments. Two containers are loaded on different vessels on different dates under separate bills of lading. The correct conclusion is:
A. Partial shipment has occurred.
B. Shipment complies automatically.
C. Applicant approval is unnecessary.
D. Different vessels are irrelevant.
Answer: A
Reference: UCP 600 Article 31.
Question 9
A presentation includes an insurance certificate issued after shipment but stating that cover became effective no later than the shipment date. Is this acceptable?
A. Yes.
B. No, insurance must always be issued before shipment.
C. Only with applicant approval.
D. Only if issued by the carrier.
Answer: A
Reference: UCP 600 Article 28.
Question 10
The issuing bank identifies three discrepancies. The applicant waives only one. What should the issuing bank do?
A. Honour because one discrepancy was waived.
B. Refuse because unresolved discrepancies remain.
C. Ignore all discrepancies.
D. Amend the credit.
Answer: B
Question 11
Which party issues the documentary credit?
A. Advising Bank
B. Confirming Bank
C. Issuing Bank
D. Beneficiary
Answer: C
Question 12
A confirming bank has added its confirmation. Which obligation has it assumed?
A. Customs clearance.
B. Independent undertaking to honour a complying presentation.
C. Cargo inspection.
D. Marine insurance.
Answer: B
Reference: UCP 600 Article 8.
Question 13
A credit expires on 31 August. Shipment occurred on 10 August. Presentation is made on 29 August, within the required presentation period. The presentation is:
A. Timely.
B. Late.
C. Invalid because shipment was earlier than expiry.
D. Automatically discrepant.
Answer: A
Question 14
Which document is not a transport document under UCP 600?
A. Air Waybill
B. Bill of Lading
C. Sea Waybill
D. Commercial Invoice
Answer: D
Question 15
A credit requires "Freight Prepaid." The bill of lading bears no freight notation. The correct conclusion is:
A. Complying.
B. Discrepant because the required indication is absent.
C. Acceptable if freight has actually been paid.
D. Refer to customs.
Answer: B
Question 16
Which ICC publication provides guidance on examining documents under UCP 600?
A. URDG 758
B. ISBP 821
C. ISP98
D. Incoterms® 2020
Answer: B
Question 17
A credit requires 110% insurance coverage of the CIF value. The insurance certificate shows 125% coverage. What is the correct conclusion?
A. Discrepant because it exceeds the required amount.
B. Complying because the minimum requirement is satisfied.
C. Discrepant because the percentage must be exact.
D. Refer to the applicant.
Answer: B
Question 18
A beneficiary presents documents one day after the credit expiry date. What is the result?
A. Complying if shipment was timely.
B. Discrepant because presentation is after expiry.
C. Honour is mandatory.
D. The bank should extend the expiry.
Answer: B
Question 19
Under UCP 600, banks deal in:
A. Goods.
B. Services.
C. Documents.
D. Contracts.
Answer: C
Question 20
Which document normally evidences shipment by sea?
A. Certificate of Origin.
B. Bill of Lading.
C. Insurance Certificate.
D. Packing List.
Answer: B
Question 21
A transferable credit has been transferred once. The second beneficiary wishes to transfer it again. Unless otherwise provided, what is the correct conclusion?
A. Permitted.
B. Not permitted.
C. Allowed with carrier approval.
D. Allowed after shipment.
Answer: B
Reference: UCP 600 Article 38.
Question 22
Which operational scenario presents the highest fraud risk?
A. Invoice dated after shipment.
B. Beneficiary requests proceeds to a newly opened bank account in another jurisdiction shortly before payment.
C. Packing list is unsigned.
D. Insurance certificate issued after shipment but effective from shipment.
Answer: B
Question 23
A nominated bank is requested to negotiate but declines to do so. Under UCP 600, which statement is correct?
A. It is always obliged to negotiate.
B. It is under no obligation to negotiate unless it has expressly agreed.
C. It must honour the credit.
D. It automatically becomes the confirming bank.
Answer: B
Reference: UCP 600 Article 12.
Question 24
A credit is issued subject to UCP 600. The beneficiary presents all required documents, and they comply with the terms and conditions of the credit. What must the issuing bank do?
A. Await applicant approval.
B. Honour the presentation.
C. Inspect the goods.
D. Review the sales contract.
Answer: B
Question 25
A presentation contains no discrepancies. The applicant nevertheless instructs the issuing bank not to pay because of an alleged quality dispute with the goods. What should the issuing bank do?
A. Refuse payment.
B. Honour the complying presentation because the credit is independent of the sales contract.
C. Await arbitration.
D. Request a court order before acting.
Answer: B
Reference: UCP 600 Articles 4, 5, and 7.
These first 25 questions establish the foundation of the question bank while already introducing examiner-style application and judgment. We can continue with Questions 26–50, focusing on more complex document examination, transport documents, and multi-discrepancy case studies, progressively increasing the difficulty toward expert level.
1. L/C is an undertaking of making payment given by -
212. Which one of the following is not Original;
(A) Importer to Beneficiary
(B)
Issuing
Bank to Negotiating Bank
(C)
Opening
Bank to Consignor
(D) Consignee to Consignor
2. Generally
which bank makes initial payment to the exporter after receiving the documents?
(A)
The Reimbursing
Bank
(B)
The
Advising Bank
(C)
The
Negotiating Bank
(D)
None
of these
3. Which
of the following belongs to pre-shipment credit?
(A)
FBP
(B)
PAD
(C)
LIM
(D)
Back
to Back L/C
4. Bill
of Lading is -
(A)
a
negotiable instrument
(B)
a
non-negotiable instrument
(C) quasi-negotiable
instrument
(D)
None
of these
5. Incoterm
indicate who will bear -
(A)
Cost
of Carriage
(B)
Risk
of Carriage
(C) Both
(a) and (b)
(D)
None
of these
6. In
a letter of credit transaction as per UCPDC, banks deal in -
A)
Documents and not in goods
B)
Goods
and not in documents
C)
Both
documents and goods
D)
None
of these
7. Acceptance
of drawee is required in case of -
A)
bill payable after sight;
B)
bill
payable on demand;
C)
promissory
note payable on demand.
D)
None
of these
8. Protest
is necessary in case of dishonour of -
A)
Foreign
promissory note;
B)
Foreign Bill of Exchange
C)
Inland
Bill of Exchange
D)
None
of these
9. A
bill of Exchange drawn in Delhi and payable in London is an example of -
A)
Inland
Bill
B)
Foreign Bill
C)
Clean
Bill
D)
None
of these
10. A
X of Mumbai draws a bill of exchange on Y of Delhi payable at London. It is an example
of -
A)
Inland
Bill
B)
Foreign Bill
C)
Accommodation
Bill
D)
None
of these
11. If
a bill of exchange dated January 31, 1983 is payable one month after date, the
due date of the instrument will be -
A)
February 28, 1983
B)
March 1, 1983
C)
March 2, 1983
D)
March 3, 1983
12. A
non-trading joint stock company can draw or accept negotiable instrument if it
has been given such power of by -
A)
its memorandum of association; (it is
alright)
B)
its
articles of association;
C)
the
Companies Act.
D)
None
of these
13. Presentment
means placing before the drawee a negotiable instrument for -
A)
acceptance;
B)
payment;
C)
sight, acceptance or payment.
D)
None
of these
14. A
drawee is to be given for deliberations at least a time of -
A)
24
hours;
B)
48 hours;
C)
72
hours
D)
None
of these
15. Presentment
for acceptance is required in case of -
A)
every
bill of exchange;
B)
every
promissory note;
C)
every bill of exchange payable after sight;
D)
None
of these
16. A
bill should be presented for acceptance in case of insolvency of a drawee to -
A)
official receiver;
B)
drawee
in case of need;
C)
acceptor
for honour
D)
None
of these
17. In
a letter of credit – backed mechanism, the Advising Bank’s responsibility is to
-
A.
inform
issuing Bank as to whom to issue the letter of credit;
B.
advise
the buyer the despatch of documents by the seller;
C.
inform the beneficiary/ seller about the
letter of credit;
D.
None
of the above
18. In
terms of UCPDC-600 in absence of any indication in the Letter of Credit, it
will be treated as -
A. Revocable Letter of Credit;
B. Irrevocable
Letter of Credit;
C. Not a Letter of Credit;
D. Cancelled Agreement.
19. When
in a letter of credit the confirming bank confirms the credit, it -
A.
does
not take any liability;
B.
undertakes
to make timely delivery of the documents;
C.
undertakes on its part the liability under
the L/C;
D.
None
of the above
20. A
bill of lading is -
A.
a
negotiable instrument;
B.
quasi – negotiable instrument;
C.
a non
– negotiable instrument;
D.
non –
transferable instrument.
21. Is Bangladesh Bank a Schedule Bank?
(A) No, it is the Central Bank of Bangladesh.
(B) Yes, but exempted from keeping Liquidity
like commercial banks by the Bank Companies Act-1991
(C) No,
it is the Central Bank Established under Negotiable Instrument Act-l 881
22. A Bill of Exchange is payable:
(A) Only on Demand or at a fixed time.
(B) On Demand or at a fixed or determinable
future time.
(C) Only at a fixed time or determinable
future time.
23.
Validity of LCA form for opening of L/C-
|
|||||
a.
|
120
days
|
b.
|
150 days
|
||
c.
|
100
days
|
d.
|
90
days
|
||
24.
Who issues LC Authorization Form
|
||||||||
AD
|
a.
|
BB
|
||||||
CCI
& E
|
b.
|
None of the above
|
||||||
25.
How many incoterms are in the present revision?
|
||||||||
12
|
a.
|
11
|
||||||
9
|
b.
|
13
|
||||||
26.
What is the responsibility of an advising Bank?
|
|||||||||||||||
To
issue LC
|
a.
|
To confirm the authenticity of a LC
|
|||||||||||||
To
make payment to the exporter
|
b.
|
To
give a payment undertaking
|
|||||||||||||
27.
Which is not a currency as per FERA 1947?
|
|||||||||||||||
Bills
of Exchange
|
a.
|
LC
|
|||||||||||||
Bill of Lading
|
b.
|
Drafts
|
|||||||||||||
28.
Which kind of LC is generally opened under Export LC?
|
|||||||||||||||
SLC
|
a.
|
BBLC
|
|||||||||||||
ULC
|
b.
|
Stand
by LC
|
|||||||||||||
29.
|
AD Branch may allow Interest on the balances held in
FC Accounts.
|
||||||||||||||
True
|
a.
|
False
|
|||||||||||||
30. Bill of entry is the proof of :
|
|||||||||||||||
Import
|
a.
|
Release
of goods
|
|||||||||||||
Custom
clearance
|
b.
|
Payment complied with value of goods.
|
|||||||||||||
31. What is the LC value for which credit
report is mandatory for opening of LC against indent?
|
|||||||||||||||
10 Lac and above
|
a.
|
16 Lac and above
|
|||||||||||||
15 Lac and above
|
d
|
14 Lac and above
|
|||||||||||||
32.
Which of the following is not among the main/core parties of LC-
|
|||||||||||||||
issuing
bank
|
a.
|
advising bank
|
|||||||||||||
beneficiary
|
b.
|
confirming
bank
|
|||||||||||||
33.
As per CFR term, who covers the cost of main carriage-
|
|||||||||||||||
exporter
|
a.
|
importer
|
|||||||||||||
bank
|
b.
|
none
of the above
|
|||||||||||||
34.
For examining documents concerned bank has maximum-
|
|||||||||||||||
5 banking days
|
a.
|
10
banking days
|
|||||||||||||
15
banking days
|
b.
|
20
banking days
|
|||||||||||||
35. Bill of entry will be overdue after
|
|||||||||||||||
90 days
|
a.
|
21 days
|
|||||||||||||
120 days
|
b.
|
7 days
|
|||||||||||||
36. The basic difference between a deferred L/C
& a UsanceL/C is the issuance of Bill of Exchange
|
|||||||||||||||
True
|
a.
|
False
|
|||||||||||||
37.
From which country Bangladesh received most of its Wage Earner’s Remittance?
|
|||||||||||||||
U.S.A
|
a.
|
Saudi Arabia
|
|||||||||||||
U.A.E
|
b.
|
All of the above.
|
|||||||||||||
38. What is the name of the latest revision of
incoterms
|
|||||||||||||||
Incoterms
2010
|
a.
|
Incoterms 2012
|
|||||||||||||
Incoterms 2011
|
b.
|
Incoterms 2008
|
|||||||||||||
39.
Import policy is issued by -
|
|||||||||||||||
Bangladesh bank
|
b.
|
Ministry of Finance
|
|||||||||||||
Ministry of Commerce
|
d.
|
Association
of bankers
|
|||||||||||||
40.
Export business should be routed through-
|
|||||||||||||||
Bangladesh
Bank
|
a.
|
Authorized
Dealer
|
|||||||||||||
Ministry
of Finance
|
b.
|
None
of the Above
|
|||||||||||||
41. What is the Time Limit
for Shipment of Goods from LCAF issue date or registration date for any commercial
items?
|
|||||||||||||||
8 Month
|
a.
|
9 Month
|
|||||||||||||
7 Month
|
b.
|
11 Month
|
|||||||||||||
42. Export proceeds must be repatriated within -
|
||||||||||||||||||||||||||
90 Days
|
a.
|
120 Days
|
||||||||||||||||||||||||
180 Days
|
d
|
None of the Above
|
||||||||||||||||||||||||
43.
While importing through land ports Bill of Entry should be collected through
importer.
|
||||||||||||||||||||||||||
True
|
a.
|
False
|
||||||||||||||||||||||||
44. ERQ stands For :
|
||||||||||||||||||||||||||
Export
Requirement Quota
|
b.
|
Export
Retention Quality
|
||||||||||||||||||||||||
Export Retention Quota
|
d.
|
Export
Retention Quantity
|
||||||||||||||||||||||||
45.
What is the elaboration of URR-
|
||||||||||||||||||||||||||
Uniform Rules for Reimbursement
|
a.
|
Uniform
Rules for Reimbursement under Documentary Credits
|
||||||||||||||||||||||||
Uniform
Rules for
Reimbursement
under Documentary Collections
|
b.
|
none
of the above
|
||||||||||||||||||||||||
46.
Documents required in a documentary credit operation according to UCPDC
includes-
|
||||||||||||||||||||||||||
transport
documents
|
a.
|
commercial
invoice
|
||||||||||||||||||||||||
insurance
documents
|
b.
|
all of the above
|
||||||||||||||||||||||||
47.
Issuing Bank’s liability is-
|
||||||||||||||||||||||||||
primary liability
|
a.
|
secondary
liability
|
||||||||||||||||||||||||
no
liability
|
b.
|
none
of the above
|
||||||||||||||||||||||||
48.
How many types of LC according to tenor?
|
||||||||||||||||||||||||||
2
|
a.
|
3
|
||||||||||||||||||||||||
6
|
b.
|
4
|
||||||||||||||||||||||||
49. Back to back LC has…….parties
|
||||||||||||||||||||||||||
2
|
a.
|
4
|
||||||||||||||||||||||||
3
|
b.
|
5
|
||||||||||||||||||||||||
50.
FERA-1947 is applicable for
|
||||||||||||||||||||||||||
Residents
|
a.
|
Bangladesh Citizens
|
||||||||||||||||||||||||
Non-residents
|
b.
|
UN
|
||||||||||||||||||||||||
Ques.
|
4)
|
An Exporter must
have.
|
||||||||||||||||||||||||
a.
|
Trade license
|
b.
|
Export Registration Certificate(ERC) issued by the CCI & E
|
|||||||||||||||||||||||
c.
|
VAT -Registration
|
d.
|
TIN Certificate
|
|||||||||||||||||||||||
e.
|
All of these
|
f.
|
None of these
|
|||||||||||||||||||||||
Ques.
|
5)
|
Documents under UCPP 600
|
||||||||||||||||||||||||
a.
|
Commercial Invoice
|
b.
|
Transport Documents
|
|||||||||||||||||||||||
c.
|
Insurance Documents
|
d.
|
All of these
|
|||||||||||||||||||||||
e.
|
None of these
|
|||||||||||||||||||||||||
Ques.
|
6)
|
Import can be made without L/C in few cases
|
||||||||||||||||||||||||
a.
|
True
|
b.
|
False
|
|||||||||||||||||||||||
Ques.
|
7)
|
Import Registration Certificate is not required in case of
import of capital machinery for new industry
|
||||||||||||||||||||||||
a.
|
False
|
b
|
True
|
|||||||||||||||||||||||
Ques.
|
12)
|
Letter of Credit (LC) is a banking instrument used
for-
|
||||||||||||||||||||||||
a.
|
Export-
Import
|
b.
|
Foreign Remittance
|
c.
|
Local Money Transfer
|
|||||||||||||||||||||
d.
|
Consumer Loan Security
|
e.
|
None of these
|
|||||||||||||||||||||||
Ques.
|
1)
|
Regulatory Frame work of International
Trade-
|
|||||
a.
|
UCPDC, URC, URR, INCOTERMS
|
||||||
True
|
False
|
||||||
Ques.
|
2)
|
LC is a conditional undertaking given by the Issuing bank to an
exporter.
|
|||||
True
|
False
|
||||||
Ques.
|
3)
|
ERC issued by Bangladesh bank.
|
|||||
a.
|
True
|
b.
|
False
|
||||
Ques.
|
4)
|
Back to Back LC is opened to finance exporter.
|
|||||
a.
|
True
|
b.
|
False
|
||||
Ques.
|
5)
|
Packing Credit is adjusted at the time of _____Negotiation_______
|
|||||
Ques.
|
6)
|
Date of Shipment is usually marked with ____On Board_____________ seal
|
|||||
Ques.
|
7)
|
In an LC an exporter is called -____Beneficiary ________________.
|
|||||
Ques.
|
8)
|
Export proceeds must be repatriated within ---120-----------days from the date of
negotiation as per Bangladesh Bank Guidelines for Foreign Exchange
Transaction.
|
|||||
Ques.
|
9)
|
IMP form is a control document
|
|||||
a.
|
True
|
b.
|
False
|
||||
1. A
resident is a person, bank or firm who/which resides/has a place of business
outside Bangladesh (tick appropriate answer):
a) True b) False
Ans:
b
2. Annual
travel quota for release of foreign currency in a calendar year is? (tick
appropriate answer):
a) USD5,000 b) USD12,000
Ans: b
3. Annual
travel quota for release of foreign currency for non SARC countries in a
calendar year is? (tick appropriate answer):
a) USD7,000 b) USD5,000
Ans: a
4. Maximum
limit for cash foreign currency release under travel quota per instance is?
(tick appropriate answer):
a) USD2,000 b) USD3000 c) USD5,000
Ans: c
5. Under
AMU ADs may open Nostro accounts in which currencies (tick appropriate
answers)?
a) ACU
Dollar b) ACU Yen c)
ACU GBP d) ACU Euro
Ans: a and d
6. ADs
may maintain accounts in freely convertible currencies with their correspondents
abroad (tick appropriate answer):
a) True b) False
Ans: a
7. For
payments against imports the prescribed application form is ………… (Tick
appropriate answer).
a) Form
TM b) Form EXP c) Form IMP
Ans:
c
8. The
ADs may obtain short term loans and overdrafts not exceeding ………. at a time
from overseas correspondents at the going market rate to meet their short term
needs. (Tick appropriate answer).
a) 180
days b) 30 days c) 7 days
Ans:
c
9. All
authorizations for selling foreign exchange for outward remittances given by
the Bangladesh Bank remain valid for a period not exceeding …………….from the date
of approval unless they are expressly stated as valid for a specified longer
period or unless they have been revalidated for a further period. (tick
appropriate answer)
a)
15 days b) 30 days c)60 days
Ans:
b
10. In
case of remittances, received in advance for exports the ADs should obtain a
signed declaration from the beneficiary on the back of the …………………certifying
the purpose of remittance. (tick appropriate answer)
a)
TM form b) EXP Form c) Advance Cash
Receipt Voucher (ARV)
Ans:
c
11. Transfer
between non-resident Taka accounts are permitted freely. (please tick
appropriate answer):
a) True b) False
Ans: a
12. Which of the following is correct? (tick the
correct answer):
a) Payments
from and receipts to the non-resident Taka accounts constitute purchase or
inward remittances and sales or outward remittances respectively of foreign
currency.
b) Payments
from and receipts to the non-resident Taka accounts constitute sale or outward
remittances and purchase or inward remittances respectively of foreign
currency.
Ans: a
13. Remittances
received against exports of goods should be certified and reported on …………..
(Tick appropriate answer)
a) Advance
Cash Receipt Voucher b) Imp Form c) EXP Forms
Ans: c
14. Any
person may take out of Bangladesh, Bangladeshi legal tender notes and coins not
exceeding ……………….. only in value at any one time. (tick appropriate answer)
a) Taka
500 b)
Taka 2000 c)
Taka 5000
Ans: c
15. Any
person ordinarily resident in Bangladesh may take out foreign exchange not
exceeding ………… or its equivalent which was brought in without declaration at
the time of returning from abroad. (tick appropriate answer)
a) USD3000 b) USD 5000 c) USD 10,000
Ans: b
16. It
is not permissible to send currency notes and coins out of Bangladesh by
post/courier or any other means. (tick appropriate answer)
a) True b)
False
Ans: a
17. Import
of goods into Bangladesh is regulated by ……………. in terms of the Import and
Export (Control) Act, 1950 through Import Policy Order (IPO) in force. (tick
appropriate answer)
a)
The
Ministry of Commerce
b) Ministry
of Industries
c) Ministry
of Finance
18. Import
Policy Order (IPO) and Public Notices are issued from time to time by (tick
appropriate answer) Con
a)
The Office of the NBR
b)
Controller General of Accounts
c) Office of the Chief Controller
of Imports and Exports.
19. In
terms of the Importers, Exporters and Indentors (Registration) Order, 1950/1969/1981
no person can import goods into Bangladesh unless he is registered with NBR/MCCI/CCI&E
unless exempted from the provisions of the said Order. (tick appropriate
answers)
Ans: 1950 and CCI & E
20. In
case the importer is new customer, the AD should obtain certificate from the AD
through which the applicant imported earlier to the effect that no …………………. is
………… for submission by the importer. (tick appropriate answer)
a) Bill of Lading & due b)
Bill of Exchange & overdue c)
Bill of Entry & overdue
21. The
LCAFs, available with the ADs, are issued in sets of 3/4/5 copies each.
Of these, the one marked as “Customs Purpose/Statistical Purpose/Exchange
Monitoring Purpose” should be used for opening LC and for effecting remittance
(tick appropriate answer)
Ans: 5 & Exchange Monitoring
Purpose.
22. In
case of import on FOB basis, full LCAF value is remittable. (tick appropriate
answer)
a)
True b) False
Ans: b
23. In
case of import of items other than capital machinery and spares the LCAF
remains valid for remittance for: (tick appropriate answer)
a) 9
months b) 12 months
Ans: b
24. In
case of import of items for capital machinery and spares the LCAF remains valid
for remittance for: (tick appropriate answer)
a) 12
months b) 17 months c) 18 months
Ans: b
25. DP
stands for –(tick appropriate answer)
a) Deferred
Payment b)
Delivery against payment
Ans: b
26. Which
of the following transport documents is a negotiable instrument?
a) Airway
Bill b) Railway Receipt c) Bill of Lading d) Truck Receipt
Ans: c
27. Import
of capital machinery is allowed to be opened upto maximum ………………. deferred
payment/Usance basis without prior approval of Board of Investment. (tick
appropriate answer)
a) 90
days b) 180 days c)
360 days
Ans: c
28. Import
of Industrial Raw material for own use of industrial importers including back
to back imports is allowed under Usance basis for a maximum of………………... (tick
appropriate answer)
a) 360
days b) 180 days c) 120 days
Ans: b
29. Import
of coastal vessels including oil tankers and ocean going vessels including
those procured for scrapping is allowed under Deferred/Usance basis for a
maximum of (tick appropriate answer).
a) 120
days b) 180 days
c) 360 days.
Ans: c
30. Import
of agricultural implements and chemical fertilizers is allowed maximum deferred
payment of (tick appropriate answer)
a) 90
days b) 120 days b) 180 days c)
360 days
Ans: b
31. Deferred
period for import of life savings drugs is maximum (tick appropriate answer)
a) 360
days b) 180 days c) 120 days d) 90 days.
Ans: d
32. What
is the size of EDF available with Bangladesh Bank? (tick appropriate answer)
a) USD500
million
b) USD1000
million
c)
USD1500
million
Ans: c
33. For
a single exporter what is the maxim ceiling for EDF loan? (tick appropriate
answer)
a) USD5
million
b) USD10
million
c)
USD15
million
Ans: c
34. EDF
interest rate:
a) 6
months LIBOR + 1.5%
b) 6
months LIBOR + 2%
c)
6
months LIBOR + 2.5%
Ans: c
35. “Re-export”
means export of any imported item within specific period with at least …………
value addition to the import value after reprocessing the said imported item
locally by changing either its quality or shape or both: (tick appropriate
answer)
a) 5% b) 10% c)
7%
Ans: b
36. As
per import policy we cannot import from following country: (tick appropriate
answer)
a) Iran b) Israel c)
Iran & Israel
Ans: b
37. H.S.
Code Number for import purpose, use of H.S. Code with at least …….. …….
corresponding to the classification of goods as given in the First Schedule of
the Customs Act,1969 (Act No. IV of 1969) based on the Harmonized Commodity
Description and Coding System, shall be mandatory (tick appropriate answer)
a) 6
Digits b) 8 Digits c) 10 Digits
Ans: b
38. No
import shall be allowed on CIF or CIP basis without prior approval from: (tick
appropriate answer)
a) Ministry
of Finance b) Ministry of Commerce
Ans: b
39. In
all cases of import, “country of origin” shall be mentioned clearly on the
package and container of goods. (tick appropriate answer)
a) Yes b) No
Ans: a
40. Import
of any permissible item for an amount not exceeding …………… against LCA Form
without opening of Letters of Credit s allowed only during each financial year
against remittance made from Bangladesh. (tick appropriate answer)
a) USD100,000 b)
USD50,000
Ans: a
41. A
commercial importer can import capital machinery on upto 360 days usance basis.
a) Yes b) No
Ans: b
42. Unless
otherwise specified, for import under cash foreign exchange, letter of credit
shall be opened by all importers within ……. days from the date of issue
/registration of LCA form: (tick appropriate answer)
a) 180
b) 150 c) 160
Ans: b
43. Shipment
of goods shall be made within ………… months in the case of machinery and spare
parts from the date of issuance of LCA Form by Bank (tick appropriate answer):
a) 9
Moths b) 17 Months c) 12 Months
Ans: b
44. Shipment
of goods shall be made within ………… months in the case of all other items from
the date of issuance of LCA Form by Bank (tick appropriate answer):
a) 9 Moths b) 17 Months c) 12 Months
Ans: a
45. L/C
may be opened against an indent issued by a local registered Indentor or
against a pro-forma invoice issued by a foreign manufacturer/seller/supplier
a) True
b) False
Ans: a
46. Bangladeshi
professionals living abroad may import their own professional and scientific
equipments out of their own foreign exchange earnings abroad without any value
ceiling. In such case, permission or permit from Import Control Authority shall
not be required.
a) True
b) False
Ans: a
47. In
case of import of goods as warranty replacement and consequently for returning
the defective goods to the supplier, approval is to be obtained from
a) The
import and export control authority.
b) The
Ministry of Commerce
c) The
Board of Investment (BOI)
Ans: a
48. “Block
list” required for import of
a) Industrial
Raw Material b) Capital Machinery c) Raw and Packing materials for
Pharmaceutical Industries.
Ans: c
49. Minimum
rate of value addition required for “Export of knit garments”
a) 15% b)
25% c) 20%
Ans: c
50. Minimum
rate of value addition required for “Export of all types of baby garments”
b) 15% b)
25% c) 20%
Ans: a
51. Second-hand/
reconditioned capital machineries used in industry shall be importable without
any price limit but a certificate from a surveyor enlisted, nominated or
appointed by National Board of Revenue to the effect that each machine has at
least ……… years economic life except generators or generating sets, must be
submitted along with Bill of Lading; (tick appropriate answer)
a) 5
Years b) 10 Years c) 7 Years
Ans: b
52. In
case of import of generators or generating sets, certificates to the effect
that not more than 5 (five) years old from the appropriate authority of
exporting country must be submitted.
(tick appropriate answer)
a) 5 Years b) 10 Years c) 7 Years
Ans: a
53. In
case of import of ingredients, toxic chemical elements and raw materials,
harmful for human health, used in industry, the word ……………. must be written
visibly on each drum, bottle or packet.
a) ‘Danger’
b) ‘Harmful’ c)
‘poison’
Ans: c
54. Import
of explosives including Trinitrotoluene (TNT) shall not be allowed without
prior approval of:
a) Ministry
of Defense
b) The
Chief Inspector of Explosives of the Ministry of Power, Energy & Mineral
Resources.
c) Ministry
of Home
Ans: b
55. A
firm or a person having license under Acid Control Act, 2002 (Act No. 1 of
2002)and Acid (Import, Production, Storage, Transport, Sale and use) Control
Rules, 2004 will import acid mentioned in Sub-para (9) on commercial basis or
for personal use subject to permission of the Ministry of Commerce.
a) The
Ministry of Home b) The
Ministry of Information c) the
Ministry of Commerce
Ans: c
56. Gas Cylinder or Gas
Container shall be importable with clearance certificate from
a)
The Directorate of Explosives.
b)
The Ministry of Defense
c)
The Chief Inspector of Explosives of the Ministry of Power, Energy
& Mineral Resources.
57. …………….. ………………… shall be applicable for import
of animals, plants and plant products.
a)
Quarantine conditions
b)
Phytosanitary Certificate
c)
Radioactivity Certificate
Ans: a
58. Item which does not
appear in the ……. ……….. shall not be
importable by the concerned pharmaceutical industry even if such item is
otherwise freely importable;
a)
Import permit b)
Block List
Ans: b
59. In case of import of
wine/liquor, date of expiry need not to be mentioned.
a)
True b) False
Ans: a
60. In case of import of food
items below the standard set by BSTI shall be returned to the exporting
country/any third country at importer’s own cost. Such conditions should be
added to L/C for imports of food items.
a)
True b) False
Ans: a
61. Date of manufacture and
date of expiry shall have to be written/printed on the container/package of
those raw materials used in preparation of food and beverages which are to be
unusable after certain period of time.
a)
True b) False
Ans: a
62. In case of import of food
items as relief goods by the Government shall be released subject to be found
suitable for human consumption at the lab test conducted by
a)
The Ministry Food.
b)
The Ministry of Disaster Management and Relief
c)
The
Ministry of Health and Family Welfare
Ans: a
63. Any expatriate
Bangladeshi with income earned abroad and any foreign investor with his share
of equity can send capital machineries & raw materials on CIF or CIP basis
a)
True b) False
Ans: a
64. Goods from foreign
countries free of cost or gift items are importable on CIF or CIP basis
a)
True b) False
Ans: a
Choose
the correct answer
65. Article 1 of
UCP 600 requires the text of the credit to…
a)
Indicate that
it is subject to the rules
b) Imply that it
is subject to the rules
c) Say
nothing as all credits are subject to UCP 600 automatically
Ans: a.
66. An issuing
bank is irrevocably bound by the terms of the amendment as of the time
a)
The
issuing bank issues the amendment
b) The advising
bank receives the amendment
c) The confirming
bank agrees to confirm the amendment
d) The
beneficiary receives the amendment
Ans: a.
67. An issuing
bank is irrevocably bound to honour as of the time
a)
The issuing bank issues
the credit
b) The advising
bank receives the credit
c) The advising
bank sends the credit to the beneficiary
d) The
beneficiary receives the credit
Ans: a.
68. A credit is
issued for EUR10000 covering 10000 widgets at EUR 1 each. The credit amount is
shown as being +/-10%. This tolerance applies to both the amount and quantity.
a) False
b) True
Ans: a.
69. The advising
bank must ensure that the credit is genuine.
a) True
b)
False
Ans: b.
70. A bank that is
requested to advise a credit must send the credit to the beneficiary.
a) True
b)
False
Ans: b.
Choose
the correct answer(s)
71. According to
UCP 600, a credit may be made available with a nominated bank in 4 different
ways. Which of the following options indicate a correct way in which a credit
may be made available with a nominated bank?
a) Negotiation
b) Mixed payment
c) Sight
d) Sight payment
e) Deferred
payment
f) Avalisation
g) Acceptance
h) Usance
Ans: a, d,e and
g
72. According to
the definition in article 2 of UCP 600, negotiation means the nominated bank …
a)
Receiving the documents, reviewing them for
compliance and sending them to the issuing bank for Settlement
b)
Receiving the documents, reviewing them for
compliance, advancing funds to the beneficiary and sending them to the issuing
bank for reimbursement
c)
Receiving the documents, reviewing them for
compliance, advancing or agreeing toadvance funds to the beneficiary and
sending them to the issuing bank for reimbursement.
Ans: c.
73. When a
nominated bank acting on its nomination, a confirming bank, if any, or the
issuing bank decides to refuse to honour or negotiate, it must give a single
notice to that effect to the presenter.
The notice must state:
i. That the bank is
refusing to honour or negotiate; and
ii. Each discrepancy in
respect of which the bank refuses to honour or negotiate; and
iii.
a)
That the bank is holding the documents pending further instructions from the
presenter; or
b)
That the issuing bank is holding the documents until it receives a waiver from
the applicant and agrees to accept it, or receives further instructions from
the presenter prior to agreeing to accept a waiver; or
c)
That the bank is returning the documents; or
d)
That the bank is acting in accordance with instructions previously received
from the presenter.
Ans: iii.
74. Under UCP 600,
when an issuing bank determines that a presentation does not comply, prior to
providing a notice of refusal, it may contact the applicant for a waiver of the
discrepancies and the applicant will have a period of 5 business days in which
to provide the waiver.
a) True
b)
False
Ans:
b.
Under UCP 600, all documents issued by the
beneficiary must be dated no later than the date of
shipment.
a) True
b)
False
Ans:
b.
Choose the correct
answer(s)
75. If a credit
requires copies of a document, which of the following are acceptable:
a)
Carbon copies
b)
Photocopies
c)
Originals
Ans: a, b and c.
76. Banks will
accept as an original document one which appears to be
a)
Written
b)
Typed
c) On watermarked
or embossed paper
d)
On the issuer's
original stationery
e)
On
sequentially numbered paper
Ans:
a, b, d & e
77. The issuing
bank, confirming bank, if any, and a nominated bank acting on its nomination
shall each have a maximum period of ______ banking days following the day of
presentation to determine if a
presentation
is complying.
The number of banking
days following the day of presentation is
a) 4
b)
5
c) 6
d) 7
Ans: b.
78. Commercial
invoices must appear to be issued by the
a) Manufacturer
b) Pproducer
c)
Beneficiary
d) Exporter
Ans: c.
79. A credit calls
for a signed commercial invoice but the beneficiary presents an invoice that is
not signed.As sub-article 18 (a) (iv) states that invoices need not be signed,
the unsigned invoice is acceptable under UCP 600.
a) No
b)
Yes
Ans: a.
80. Which of the
following parties may not sign a bill of lading?
a) Master
b) Carrier
c) Agent of the
carrier
d) Captain
e)
Owner
Ans: e.
81. The date of a
postal receipt is deemed to be the date of shipment.
a) True
b)
False
Ans: a.
82. The credit is
issued stating (amongst other insurance conditions) 'for 110% of the invoice
value'. Does this mean that the insurance must be issued for 'exactly' 110% of
the invoice value?
a)
Yes
b) No
Ans: b.
83. According to
UCP 600, insurance documents issued and signed by underwriters are not
acceptable.
a)
True
b)
False
Ans: b.
84. Article 1 of
UCP 600 requires the text of the credit to…
a) Indicate that
it is subject to the rules
b)
Imply that it is subject to the rules
c) Say nothing as
all credits are subject to UCP 600 automatically
Ans: a.
85. If a credit
uses the word “about” in connection to the amount of the credit or the quantity
of the goods, the word “about” means that there is a tolerance in relation to
the amount or quantity of:
a)
+or- 10%
b) +10%
c) 0%
Ans: a.
86. A bank that is
requested to advise a credit must send the credit to the beneficiary.
a) True
b) False
Ans: b.
87. A confirming
bank must extend its confirmation to an amendment?
a) Yes
b) No
Ans: b.
88. Under UCP 600,
which of the following parties make the decision as to whether or not documents
represent a complying presentation?
a) The applicant
b) The issuing
bank
c) The nominated
bank
d) The confirming
bank
e) The
advising bank
Ans: b, c, and d
89. Reimbursement
by an issuing bank for the amount of a complying presentation under a credit
available by
acceptance or deferred
payment is due at maturity
a) only if the
nominated bank has prepaid or purchased before maturity
b) only if the
beneficiary presents the accepted draft or deferred payment undertaking
c) whether or not the nominated bank prepaid or
purchased before maturity
Ans: c.
90. An issuing
bank must reimburse a nominated bank that has honoured or negotiated a
complying
presentation
a)
and forwarded the documents
to the issuing bank
b) and forwarded
the documents to the confirming bank or issuing bank
c) and
claimed reimbursement from the reimbursing bank but has not been paid
Ans: a.
91. Under UCP 600,
all documents issued by the beneficiary must be dated no later than the date of
shipment.
a) True
b) False
Ans: b.
92. Commercial
invoices must appear to be issued by the
a) manufacturer
b) producer
c)
beneficiary
d) exporter
Ans: c.
93. Which of the
following documents must be dated?
1. Commercial invoice.
2. Insurance certificate.
3. Non-negotiable sea
waybill.
4. Certificate of origin.
Select one:
A. 1 and 2 only.
B. 1, 2 and 4 only.
C. 2, 3 and 4 only.
D. 2 and 4 only.
Answer: 2, 3 and 4 only.
94. If the term
‘exporting country’ is used in a credit without further definition being given
in the credit as
to its meaning, it shall
have which of the following meanings?
1. The country where the
shipper is domiciled.
2. The country of origin
of the goods.
3. The country of receipt
of the goods by the carrier.
4. The country from which
shipment or despatch is made.
Select one:
A. 1 and 2 only.
B. 1, 2 and 4 only.
C. 3 and 4 only.
D. 2, 3 and 4 only.
Answer: 2, 3 and 4 only.
95. A credit
requires presentation of an insurance certificate covering risks in accordance
with Institute Cargo Clauses (A). Which of the following would also be
acceptable?
1. An insurance policy
covering ‘all risks’.
2. An insurance policy
covering ‘Institute Cargo Clauses (A)’.
3. An insurance
certificate covering risks in accordance with Institute Cargo Clauses (B).
4. An insurance certificate covering risks in
accordance with Institute Cargo Clauses (C).
Select one:
A) 1 only.
B) 2 only.
C) 3 and 4 only.
D) 1 and 2 only.
Answer: 2 only.
97. A
credit that requires presentation of an invoice will be satisfied by which of
the following?
1. Commercial invoice.
2. Proforma invoice.
3. Sales invoice.
4. Tax invoice.
Select one:
A) 2 and 4 only.
B) 1 only.
C) 1 and 3 only.
D) 1, 3 and 4 only.
Answer: 1, 3 and 4 only
98. Which of
the following statements about drafts are correct?
1. It must be dated.
2. It must state its
value in both words and figures.
3. There must be no
conflict between the amount in words and figures.
4. Corrections and
alterations need not be authenticated.
Select one:
A) 1 and 3 only.
B) 1, 2 and 3 only.
C) 1, 3 and 4 only.
D) 2 and 3 only.
Answer: 1 and 3 only.
99. A
credit is issued for USD 350,000 on a cumulative basis allowing for 10 monthly
drawdowns of
USD35,000. Assuming that USD 33,000 is drawn in month one and that USD
28,000 is drawn in
month two, what is the amount that can be drawn
in month three?
Select one:
A) USD 35,000.
B) USD 42,000.
C) USD 44,000.
D) USD 105,000.
Answer: USD 44,000.
100. The
buyer has the least risk by
agreeing which of the following payment methods?
a) Documentary
credit.
b) Payment in
advance.
c) Open account
trading.
d) Documentary
collection.
Ans: c
101. An
importer requires goods of a stipulated quality while the exporter requires
certainty of
payment.
Which of the following would best
meet all requirements?
a) A confirmed standby
credit payable on demand calling for beneficiary's quality certificate.
b) A confirmed
documentary credit payable at sight calling for beneficiary's quality
certificate.
c) An unconfirmed
documentary credit payable at sight with drafts on issuing bank calling for a
third-party quality
certificate.
d) A confirmed
documentary credit available by acceptance with drafts drawn on confirming
bank calling for a third-party quality
certificate.
Ans: d
102. Which
documentary credit enables a beneficiary to obtain pre-shipment financing
without
impacting his facility?
a) Transferable.
b) Red clause.
c) Irrevocable, payable
at sight.
d) Confirmed irrevocable, payable at maturity.
Ans: b
103. Which of the following statements is correct
regarding transferable documentary credits?
a) The first beneficiary may request that
confirmation be withheld from the transferred credit.
b) The first beneficiary may cancel the
transferred credit without the second beneficiary's
consent.
c) A transferred
credit can be transferred at the request of the second beneficiary to any
subsequent beneficiary.
d) The
transferred credit may expire in the second beneficiary's domicile on the
expiry date of
the first beneficiary's credit.
Ans: d
104. If a credit states that GBP 10,000 may be
drawn each month during its one-year validity, then the
credit is:
a) Clean.
b) Revolving.
c) Evergreen.
d) Transferable.
Ans: b
105. In
accordance with UCP 600, which of the following terms may not be altered when transferring a
documentary credit?
a) Credit amount.
b) Required documents.
c) Period for
presentation.
d) Amount of insurance cover.
Ans: b
106. Where
a documentary credit includes a shipping schedule and an instalment is not shipped within
the stipulated period, which of the following
statements concerning the documentary credit is
correct?
a) It continues
to be available for that instalment only.
b) It continues
to be available for that and future instalments.
c) It ceases to
be available for that instalment only.
d) It ceases to
be available for that and future instalments.
Ans:
d
107. A
cumulative, revolving documentary credit for USD 22,500 allows full monthly
drawings and is
valid for one year. Full monthly drawings were
made during the first, second, fourth, fifth and
seventh months and there have been no other
drawings. In the last month of the documentary
credit’s validity, what is the maximum value that
can be drawn?
a) USD 22,500.
b) USD 112,500.
c) USD 157,500.
d) USD
180,000.
Ans: c
108. Which
of the following percentages represents the minimum insured value on the
insurance
document, unless otherwise stated in the
documentary credit?
a) 100%.
b) 105%.
c) 110%.
d) 115%.
Ans:
c
109. In accordance with UCP 600, all the
following statements relating to commercial invoices are
correctexcept
that they must:
a) Be manually
signed by the beneficiary.
b) Be made out in
the name of the applicant.
c) Appear to have
been issued by the named beneficiary.
d) Indicate
the description of goods corresponding with the documentary credit.
Ans: a
110. Uniform rules to govern documentary credit
transactions were introduced for all of the following
reasonsexcept
to:
a) Comply with
international law.
b) Avoid disputes
and misunderstandings.
c) Ensure
consistency of approach across banks.
d) Obtain a
common interpretation of documentary credits.
Ans:
a
111. An
advising bank receives the beneficiary's request to partially transfer an
irrevocable transferable
documentary credit, which is freely available and
does not nominate a transferring bank. In
accordance with UCP 600, the advising bank:
a) May transfer
the documentary credit as requested.
b) May transfer
the documentary credit only in its entirety.
c) Should request
the issuing bank to authorise a partial transfer.
d) Should
obtain the issuing bank's authorisation to act as the nominated transferring
bank.
Ans: d
112. Which of the following statements is not correct for a credit that is
subject to UCP 600?
If
the credit:
a) A prohibits
transhipment, an air transport document may indicate that transhipment will or
maytake place.
b)
Requires a
bill of lading indicating freight prepaid, a notation of freight prepaid as per
charterparty is acceptable.
c) Calls for one
original rail transport document, presentation of a rail transport document
marked‘duplicate’ is acceptable.
d) Calls for a
multimodal transport document made out to order, an endorsement made by, for
oron behalf of the shipper is required.
Ans:
b
113. Financial Action Task Force recommendations
require banks to exercise due diligence in their
relationships with customers. Banks are required
to have procedures in respect of all of the
following, except to:
a) Know their
customers.
b) Know what the
goods will be used for.
c) Know the
beneficial owners of the parties to a transaction.
d) Understand the
nature of any underlying business relationship to the transaction.
Ans: b
114. To avoid the possibility of committing a
money laundering offence, documentary credit
Practitioners should:
1. report any suspicion.
2. follow their bank's
procedures.
3. stop any routine
contact if they have a suspicion about a transaction.
4. not consider as
suspicious any transaction from a branch of their bank in a high-risk country.
a) 1 and 2 only.
b) 1 and 3 only.
c) 2 and 4 only.
d) 3
and 4 only.
Ans: a
115. The
ICC discourage sanction clauses in documentary credit transactions for all but
one of the
following reasons. Which is the exception?
Because they may:
a) Be illegal.
b) Cause
uncertainty for the beneficiary.
c) Cast a doubt
on the bank's undertaking.
d) Give
the bank discretion whether to pay or not.
Ans: a
116. By nominating a bank to incur a deferred
payment undertaking without adding its confirmation, the
issuing bank:
a) Authorizes the
nominated bank to purchase or prepay documents.
b) Authorizes the
nominated bank to accept drafts under the usance agreement.
c) Allows the
nominated bank to advance funds to the beneficiary upon demand.
d) Imposes
an obligation on the nominated bank to honour or negotiate documents.
Ans: a
117. Which of the following banks must honour a complying presentation?
1. An issuing bank with
which the documentary credit is available by acceptance.
2. A nominated bank under
a freely negotiable credit payable at sight.
3. A confirming bank
where the credit is available by sight payment and the nominated bank
Does not pay.
4. A reimbursing bank
that has issued a reimbursement undertaking.
a) 1 and 3 only.
b) 2 and 3 only.
c) 1, 2 and 3
only.
d) 1,
2 and 4 only.
Ans: a
118. When a bank has accepted a usance draft, it
is responsible for effecting payment at maturity when:
a) The draft is
verified by the applicant.
b) The draft is
presented by the beneficiary.
c) It has
received funds from the issuing bank.
d) It
has received funds from the reimbursing bank.
Ans: b
119. Which of the following statements is correct
regarding a deferred payment obligation?
Payment is made:
a) Only by the
issuing bank.
b) On the
maturity date of the draft.
c) Upon
presentation of complying documents.
d) At a future
date in accordance with the documentary credit.
Ans:
d
120. Which of the following is not an undertaking of the confirming
bank for a credit available by:
a. Sight payment
– to pay at sight.
b. Deferred
payment – to incur a deferred payment undertaking.
c. Negotiation –
to negotiate with recourse time draft drawn by the beneficiary.
d. Acceptance –
to honour a time draft drawn on nominated bank if the nominated bank does not
accept the time draft.
Ans:
c
121. A beneficiary requests the confirming bank
to purchase complying documents presented under adeferred payment credit. In
accordance with UCP 600, which of the following actions could the confirming
bank take?
1. Obtain the issuing
bank's agreement prior to paying the beneficiary.
2. Refuse the
beneficiary's request while undertaking to pay at maturity.
3. Prepay the deferred
payment undertaking.
4. Obtain a recourse
agreement from the beneficiary.
a) 1 only.
b) 4 only.
c) 2 and 3 only.
d) 3
and 4 only.
Ans: c
122. If a credit, available with the issuing
bank, calls for a draft at 60 days after sight, it is available by:
a) Payment.
b) Negotiation.
c) Acceptance.
d) Deferred
payment.
Ans: c
123. Two parties have agreed to trade and the
seller requires the security of a documentary credit. The
buyer does not wish to pay for the goods until at
least 30 days after their arrival at the discharge
port. Given that the journey will take a maximum
of two weeks, which of the following will best suit
those requirements? A documentary credit
available with a nominated bank at:
a) 45 days after
sight.
b) 45 days after
invoice date.
c) 60 days after
invoice date.
D) 45 days after bill of lading date.
Ans: d
124. If a seller in country X wishes to receive
payment from a buyer in country Y as soon as possible,
how should the documentary credit best be made available?
a) Negotiation
with a nominated bank in country.
b) Acceptance by
the nominated bank in country.
c) Sight payment
with the issuing bank in country.
d) Sight payment
with the nominated bank in country.
Ans: d
125. The beneficiary requires the return of its
accepted time drafts in order to discount them in the
market. Which of the following best meets the beneficiary’s needs?
A
documentary credit available with the:
a) Issuing bank
by acceptance.
b) Advising bank
by negotiation.
c) Nominated bank
by negotiation.
d) Confirming
bank by deferred payment.
Ans: a
126. Which of the following is discouraged under
UCP 600?
a)
The goods description field states ‘goods per the copy of the proforma invoice
appended to the credit which forms an integral part of the credit’.
b) A copy of the sales
contract is submitted with the credit application to the issuing bank and there
is no reference to such attachment within the credit application.
c) The additional
conditions field states that this credit is relative to sales contract XYZ and
that all documents must state ’details
per purchase order 123 and contract XYZ’.
d) A copy of the purchase
order is provided to the issuing bank for information purposes only and the
goods description field of the credit application includes details of the
purchase order.
Ans: a
127. An issuing bank notifies the beneficiary
that the applicant has ceased trading and that the
documentary credit is cancelled and that
cancellation shall be effective ten days after the date of
the issue of its cancellation notice. The beneficiary
presents documents to the issuing bank that
otherwise fully comply with the credit terms
fifteen days after the date of the cancellation notice.
The issuing bank:
a) Is obliged to
honour the documents.
b) May simply
return the documents unchecked as the credit has now ceased to exist.
c) Should hold
the documents unchecked and seek further instructions from the beneficiary.
d) May refuse the
documents as more than ten days have elapsed since the issue of its
cancellation notice.
Ans: a
128. Which
of the following documents must be presented to the carrier to obtain release
of the
underlying goods?
1. Air transport
document.
2. Bill of lading.
3. Charter party bill of
lading.
4. Non-negotiable sea
waybill.
a) 1 and 2 only.
b) 1 and 4 only.
c) 2 and 3 only.
d) 3
and 4 only.
Ans: c
129. A
marine bill of lading acts as:
1. an acknowledgement of
receipt of the goods by the carrier.
2. evidence of a contract
of carriage.
3. a document of title
for the goods.
4. evidence of the
contract between the seller and the forwarding agent.
a) 1 and 4 only.
b) 2 and 3 only.
c) 1, 2 and 3
only.
d) 2,
3 and 4 only.
Ans: c
130. Which of the following do not constitute
partial shipment for goods shipped from the same place to
the same destination?
Presentation of:
1. a courier receipt
evidencing receipt of two separate packages.
2. a road transport
document indicating two different trucks.
3. two separate courier
receipts dated at different times of the same day by the same courier
service.
4. two separate road
transport documents indicating the same date of shipment but each
indicating a different
truck.
a) 1 and 2 only.
b) 1 and 3 only.
c) 1, 2 and 3
only.
d) 3
and 4 only.
Ans: b
131. A
documentary credit calls for invoices for the full CIF value and insurance
certificate covering all risks. Documents presented include invoices for the
CIF value of USD 150,000 less discount ofUSD 25,000; a bill of lading
evidencing shipment on 10 February; and insurance policy, issued on11 February,
for USD 137,500 and effective from 09 February covering Institute Cargo Clauses
A.
According to UCP 600, all of the following statements are correct except:
a) The insurance
policy is acceptable.
b) The insurance
covers shipment period.
c) The amount of
the insurance cover is sufficient.
d) The
risks covered by insurance document are acceptable.
Ans: c
132. Which
of the following documents must be
signed?
a) Packing list.
b) Certificate of
origin.
c) Commercial
invoice.
d) Weight
specification.
Ans: b
133. A credit is payable against drafts drawn at
30 days after bill of lading date and requires shipment to be effected from any European port. The bill of lading indicates receipt of
the goods by the carrier on 11 June XXXX, an on-board notation for vessel ‘A’ dated 13 June
XXXX at Felixstowe, and transhipment at Hamburg with an on board notation for vessel ‘B’ dated 16
June XXXX which has been subsequently amended by the
carrier to read as 15 June XXXX. The maturity
date for the draft is:
a. 11 July XXXX.
b. 13 July XXXX.
c. 15 July XXXX.
d. 16
July XXXX.
Ans: b
134. A
documentary credit calls for the beneficiary's invoice in three copies. Which
of the following
requirements is mandatory for a complying
presentation?
a) All must be
signed.
b) All must be
original.
c) At least one
of the three must be signed.
d) At
least one of the three must be original.
Ans: d
135. In accordance with ISBP, an invoice may
show:
1. deduction for a
discount not stated in the credit.
2. over-shipment of goods
provided they are stated to be free of charge.
3. shipment of goods not
called for in the credit.
4. shipment of goods not
called for in the credit provided they are stated to be free of charge.
a) 1 only.
b) 2 only.
c) 1 and 3 only.
d) 2
and 4 only.
Ans: a
136. A documentary credit is issued for
approximately GBP 40,000 with drafts at 30 days from date of
shipment. Documents are presented on 22 September
with bills of lading dated 01 September.
Which of the following drafts would comply?
1. 30 days from 01
September for approximately GBP 40,000.
2. 30 days from date of
shipment for GBP 38,000.
3. Due 01 October for GBP
42,000.
4. 30 days from bill of
lading date 01 September for GBP 44,000.
a) 1 and 2 only.
b) 1 and 3 only.
c) 2 and 4 only.
d) 3
and 4 only.
Ans: d
137. An
irrevocable confirmed documentary credit cannot be amended or cancelled without the
agreement of the:
a) Beneficiary
and applicant.
b) Confirming
bank and issuing bank.
c) Applicant,
confirming bank and issuing bank.
d) Beneficiary,
confirming bank and issuing bank.
Ans: d
138. A documentary credit requires the bill of
lading to state the name and address of the carrier’s agent
at the port of discharge. To comply with the
credit terms, the agent:
a) Can be at any
location in the world.
b) Must be
located at the port of discharge.
c) Must be
located in the same country as the port of discharge.
d) Must
be located in the same geographical area as the port of discharge.
Ans: a
139. A
buyer wishes to import 300 sports cars from their supplier over a three month
period. Import regulations will
only allow a maximum of 100 sports cars to be shipped into the country
each month by the buyer
without the imposition of import duties and port-to-port shipment takes a maximum of ten days. Which of the following shipment
schedules will best protect the buyer
from the imposition of
Import duties?
a) 100 cars in January,
100 cars in February, 100 cars in March.
b) 100 cars in the middle
of January, 100 cars in the middle of February, 100 cars in the middle of March.
c) 100 cars by the end of
January, 100 cars by the end of February, 100 cars by the end of
March.
d) 100 cars at the
beginning of January, 100 cars at the beginning of February, 100 cars at the
beginning of
March.
Ans: d
140. A confirming bank receives a documentary
credit containing the following additional condition:
’carrying vessel must not be older than 15 years’. Upon receipt of the
documents from the
beneficiary, the confirming bank must:
a) Look for this
statement on one of the documents.
b) Deem such a
condition as not stated and disregard it.
c) Require the
beneficiary to issue a statement of compliance.
d) Refuse
payment to the beneficiary until receipt of the issuing bank's clarification.
Ans: b
141. In accordance with UCP 600, which of the
following documents is not acceptable
in a documentary
credit issued on 01 March with documents
presented on 01 June and expiring on 10 June?
a) Certificate of
origin dated 28 February.
b) Third party
certificate of quality dated 02 June.
c) Weight
certificate issued by the beneficiary dated 15 May.
d) Bills
of lading evidencing third party as consignor dated 28 May.
Ans: b
142. A reimbursing bank has received a valid
claim under its reimbursement undertaking and is
simultaneously instructed by the issuing bank not to honour the claim. In accordance
with the URR
725, the reimbursing bank should:
a) Request the
claiming bank to cancel the claim.
b) Instruct the
claiming bank to contact the beneficiary.
c) Honour the
claim and debit the issuing bank's account.
d) Dishonour
the claim as per the issuing bank's instruction.
Ans: c
143. At the request of the issuing bank, a
reimbursing bank has issued its reimbursement undertaking in
favour of a nominated bank. The beneficiary
notify the nominated bank of the documentary credit
and subsequently presents documents direct to the
issuing bank for settlement.
What best describes the
action that the issuing bank should now take?
a) Check the documents
and, if compliant, make payment to the beneficiary through the
reimbursing bank.
b) Check the documents
and, if compliant, make payment to the beneficiary and seek
cancellation of the reimbursement undertaking.
c) Return the documents
to the beneficiary and request that documents be presented through
the nominated bank.
d) Return the documents
to the beneficiary and request that documents be presented to the
reimbursing
bank to enable the reimbursement undertaking to be utilised.
Ans: b
144. If a bank requests that an electronic record
be re-presented because the initial presentation
Appears to be corrupted, the:
a) Date of the
re-presentation becomes the new presentation date.
b) Beneficiary
has 21 calendar days to re-present the electronic record.
c) Time for
examination is suspended and resumes when the re-presented records are
received.
d) Re-presentation
may be with paper documents even if the documentary credit calls for
electronic
records.
Ans: c
145. A documentary credit pre-advice is issued on
01 March for USD 510,000 with the following terms
and conditions:
Partial shipment allowed.
Latest shipment date 30 April.
Expiry date 15 May.
On
02 March the applicant requests an amendment prohibiting partial shipment and
extending the
expiry date to 30 May. In accordance with UCP
600, what action must the
issuing bank take?
a) Clarify with
the applicant the period for presentation.
b) Issue the
documentary credit incorporating all the amendments.
c) Issue the documentary
credit incorporating only the extended expiry date.
d) Issue
the documentary credit as originally instructed, without amendments.
Ans: d
146. Documents presented to the issuing bank have
been found discrepant. The bank has left a
message for the applicant to discuss the
discrepancies.
The bank should:
a) return the documents
to the presenter.
b) continue to hold the
documents until discussion with the applicant. No further action is
required.
c) send notice of refusal
to the presenter, listing all discrepancies and current disposition of the
documents.
d) send notice of refusal
to the presenter without listing discrepancies, as the applicant has not
been
consulted.
Ans: c
147. Which
of the following statements are correct in relation to documentary credit
risks?
1. The advising bank
incurs payment risk by advising an unconfirmed credit.
2. A negotiating bank is
not concerned with issuing bank counterparty risk when making
payment to the
beneficiary.
3. The confirming bank’s
main risk is that of non-reimbursement by the issuing bank after
Effecting the payment to the beneficiary.
4. A reimbursing bank that has not issued a
reimbursement undertaking does not have any risk
related to the credit.
a) 1 and 2 only.
b) 1 and 4 only.
c) C 2 and 3
only.
d) D
3 and 4 only.
Ans: d
148. When a bank confirms an irrevocable
transferable documentary credit, it assumes the credit risk of
which party?
a) The applicant.
b) The issuing
bank.
c) The first
beneficiary.
d) The
second beneficiary.
Ans: b
149. The
issuing bank of a sight documentary credit issues an indemnity to a shipping
company
authorizing the release of goods to the importer
prior to presentation of documents. Documents
subsequently received are discrepant. What action
must the issuing bank take?
1. Seek agreement from
the shipping company to cancel the indemnity.
2. Send a rejection
notice to the presenting bank.
3. Approach the applicant
for a waiver of the discrepancies.
4. Pay the presenting
bank.
a) 2 only.
b) 4 only.
c) 1 and 4 only.
d) 2
and 3 only.
Ans: b
150. When an advising bank adds its confirmation
to a documentary credit, which of the following risks
has the beneficiary mitigated?
1. Issuing bank., 2.
Foreign exchange., 3. Political and 4.
Fraud.
a) 1 and 3 only.
b) 1 and 4 only.
c) 2 and 3 only.
d) 2
and 4 only.
Ans: a
151. Which of the following statements does not relate to documentary credit
risks?
a) The issuing bank may
try to mitigate the risk of non-reimbursement from the applicant by
retaining title to the goods.
b) In the event of
failure of the issuing bank, the beneficiary may need to rely on payment
directly from the applicant.
c) A forward foreign
exchange contract may provide a hedge against a difference in exchange
rates to the issuing bank.
d) The issuing bank may
not be able to honour its obligation to pay on the maturity date due to
governmental
action.
Ans: c
151. The beneficiary can mitigate the risk of
‘force majeure’ by requesting that the documentary credit
Be
made available with:
a) Any bank.
b) The issuing
bank.
c) The advising
bank.
d) The
confirming bank.
Ans: a
153. Documents, including the CMR consigned to
the issuing bank, have been delayed in transit
between the confirming bank and the issuing bank.
The applicant requires the goods urgently and
therefore requests from the issuing bank a:
a) Delivery
order.
b) Letter of
indemnity.
c) Performance
guarantee.
d) Shipping
company guarantee.
Ans: a
154. A
third-party supplier requires a notice of assignment of proceeds from the
nominated bank prior
To shipping the goods. This notice of assignment:
a) Is an
irrevocable undertaking to pay the third-party supplier.
b) Authorizes the
third-party supplier to perform the role of the beneficiary.
c) Guarantees
payment upon presentation of documents by the third-party supplier.
d) Is a
conditional undertaking from the nominated bank to pay the third-party supplier
from proceeds, if any, payable under the credit.
Ans: d
155. To clear the goods in the absence of an
original bill of lading, which document should the applicant
request from the issuing bank?
a) An indemnity.
b) A delivery
order.
c) A payment
guarantee.
d) A shipping
company guarantee.
Ans: d
156. Under a confirmed credit established in
favour of a corporate beneficiary on a syndicated basis, all
of the following aspects will be commonly covered
by the syndicate agreement except:
a) The handling
of discrepant documents.
b) The handling
of commercial disputes between the corporate beneficiary and the applicant.
c) Whether the
other syndicate banks will wish to approve the text of the credit and
amendments.
d) Whether the lead
bank's checking of documents will be acceptable to the other syndicate
banks.
Ans: b
157. Which of the following statements is correct
when an assignment of proceeds has been effectedunder a documentary credit issued
in accordance with UCP 600?
The:
a) A assignee
must present complying documents to receive payment.
b) B assignee
will receive payment of the proceeds directly from the applicant.
c) C value of the
documentary credit is reduced by the amount of the assignment.
d) D beneficiary
has assigned its rights to the stated amount of proceeds to the assignee.
Ans: d
158. Which of the following statements would not be included in an applicant's
counter indemnity when
requesting a delivery order?
The applicant:
a) Indemnifies the bank
against all actions, damages and costs.
b) Undertakes to accept
the underlying documents irrespective of discrepancies.
c) Gives the issuing bank
authority to debit its account for the full value pending inspection of
the goods.
d) Undertakes that should
the goods form part of a large consignment it will accept that
consignment
and pay the full value.
Ans: c
159. In accordance with UCP
600, which of the following terms may not be altered on a transferred
documentary credit.
a) Amount.
b) Required documents.
c) Period of presentation.
d) Amount of insurance
cover.
Ans: b
160. A documentary credit for USD 150,000.00 calls
for a full set of bill of lading and an
insurance Certificate
that covers all risks. The bill of
lading presented indicates an on board
date of 15 December.
Which of the following insurance
document are acceptable?
1. Policy for USD 185,000.00
2. Certificate dated 17
December.
3. Declaration signed by a
broker.
4. Subject to a franchise.
a) 1 and 2 only.
b) 1 and 4 only.
c) 2 and 3 only
d) 3 and 4 only
Ans: b
161. If a credit states “
first shipment is to be effected on or about’20 august 2010”, this means
Shipment can be effected during the
period
a) 14 August – 15 August
b) 15 August – 26 August
c) 15 August – 25 August
d) 16 August – 25 August
Ans: c
162. An issuing bank is
irrevocably bound by the terms of the amendment as of the time
a) the issuing bank issues
the amendment
b) the advising bank
receives the amendment
c) the confirming bank agrees to confirm the amendment
d) the beneficiary receives
the amendment
Ans: a
163. A Documentary credit
is issued for an amount of USD 10,000
& calls for its drafts to be
drawn at 30 days from
bill of lading date .Documents have been presented with a bill of
lading dated 09
November 2009 which of the following tenor on the draft
will not be
acceptable?(Mark Tick)
a) 09 December 2009.
b) 30 days from bill of
lading date.
c) 30 days after 09 November
2009.
d) 30 days date, draft dated
09 November 2009.
Ans: b
164. Which of the
following documents MUST be signed?
a) Packing list..
b) Certificate of origin.
c) Commercial Invoice.
d) Weight Specification.
Ans: b
165. A Credit requires
an ‘Invoice’ without further definition.
Which of the following “MUST be
considered a discrepancy?
a) Presentation of a
document identified as a tax invoice..
b) An invoice which is not
signed..
c) An invoice made out in a
different currency to the credit.
d) An invoice issued for an
amount in excess of that permitted by the credit.
Ans: c
166. Mention maximum
deferred period allowable for import of
the following items As per GFET:
a) Capital Machineries
upto ……….. days.
b) Agriculture implements
and chemical fertilizer upto ……….days.
c) Life saving Drugs upto
………………days.
Ans: a)
360. b) 180, c) 90
167. Which party/ parties
can not sign the charter party Bills of Lading.
a) Captain.
b) Master.
c) Carrier.
d) Owner.
e) Charterer.
Ans: a
168. A bill of lading
states that “Packaging may not be sufficient for the sea journey”. Would
this
constitute a discrepancy.
a) Yes
b) No.
Ans: b
169. A Documentary Credit advised to a Beneficiary
payable at sight calls for document to include an
Invoice made out in the name of the
Applicant. Document presented to the Negotiating bank by
The Beneficiary include a Custom
Invoice but no Commercial Invoice. All other terms and
Conditions have been met. What action should the negotiating
bank take?
a) Reject the document as
non-complying.
b) Refer to the issuing bank
for authority to pay.
c) Return the document for
amendment by the beneficiary.
d) Pay the documents as
fully complying with the terms of the credit.
Ans: d
170. A documentary credit pre-advice is issued on
1 March for USD 2,00,000.00 with the following
terms and conditions:
- Part shipment allowed.
- Latest shipment date 30
April.
- Expiry date 15 May.
On 2 March the applicant
requests an amendment prohibiting part shipment and extending the expiry date
to 30 May . In accordance with UCP
600 what must the issuing bank do?
a) Clarify with the
applicant the period of presentation.
b) Issue the documentary
credit as originally instructed.
c) Issue the documentary
credit incorporating all the amendments.
d) Issue the documentary
credit incorporating only the extending expiry date.
Ans: b
171.
The Uniform Rules for Bank-to-Bank Reimbursements applies to –
a) Documentary Credit
b) Documentary Collection
c) SWIFT Fund Transfer
d) All of the above
Ans: a.
172.
URR725 is binding on all parties thereto, unless expressly modified or excluded
by the –
a) Documentary Credit
b) Reimbursement authorization
c) Instruction to the negotiating bank
d) Payment Instruction
Ans: b.
173.
Reimbursement authorization is ____________ the credit.
a)
Independent of
b)
Dependent on
Ans: a.
174.
A nominated bank can claim reimbursement even if it does not negotiate / honor
the presentation.
a) True
b) False
Ans: b.
175.
Advice of reimbursement undertaking amendment is sent from –
a)
Issuing bank to Reimbursing Bank
b)
Reimbursing bank to nominated
bank
c)
Reimbursing bank to claiming
bank
d)
All of the above
Ans: c.
176.
Under URR725 Issuing bank should provide necessary information in –
a)
Documentary Credit
b)
Reimbursement Authorization
c)
Reimbursement Undertaking
d)
All of the above
Ans: a and b.
177.
If Issuing Bank requires certificate of compliance in the reimbursement
authorization, the
reimbursing
bank should
a)
Disregard it
b)
Follow it
Ans: b.
178. If the reimbursing bank is
requested to accept and pay a time draft, the reimbursement
authorization must indicate the
following:
a)
tenor of draft to be drawn;
b)
drawer;
c)
party responsible for acceptance
and discount charges, if any.
d)
All of the above
Ans: d.
179.
Pre-notification of a reimbursement claim to the issuing bank must be included
in the
a)
Documentary Credit
b)
Reimbursement authorization
c)
Both
Ans: a.
180.
If a credit is available with any bank, amendment of reimbursement authorization
must be sent to –
a)
Reimbursing bank
b)
Advising Bank
c)
Both
Ans: c.
181.
An irrevocable reimbursement authorization cannot be amended or cancelled
without the
agreement
of the
a)
Reimbursing bank.
b)
Advising Bank
c)
Both
Ans: a.
182.
The terms of the original irrevocable reimbursement authorization (or an
authorization
incorporating
previously accepted irrevocable reimbursement authorization amendments)
will
remain
in force for the reimbursing bank until it communicates its acceptance of the
amendment to
the -
a)
Issuing bank
b)
Advising Bank
c)
Nominated Bank
Ans: a.
183. A reimbursing bank is not
required to accept or reject an irrevocable reimbursement authorization
amendment until it has received
acceptance or rejection from the _______ of its reimbursement
undertaking amendment.
a) Issuing
bank
b) Advising
Bank
c) Claiming
bank
Ans: c.
184. The claiming bank's claim
for reimbursement must be in the form of a –
a) Teletransmission
b) Signed
Claim
c) Any
of the above
Ans: a.
185. In the case of a
reimbursement undertaking, the claim must comply with the terms and conditions
of the
a) Documentary
Credit
b) Reimbursement
undertaking.
c) Reimbursement
Authorization
Ans: b.
186. When a time draft is to be
drawn on the reimbursing bank, the claim must include the following –
a) General
description of the good
b) Country
of origin
c) Place
of destination or performance
d) All
of the above
e) None
Ans: d.
187. A reimbursing bank shall
have a maximum of _____ banking days following the day of receipt of the
reimbursement claim to process
the claim.
a) Three
b) Five
c) Seven
Ans: a.
188. Except in case of a
reimbursement undertaking if a reimbursement is due on a future date, a
claims
should not be presented to the
reimbursing bank more than ____ banking days prior to such
predetermined date.
a) Three
b) Five
c) Seven
d) Ten
Ans: d.
189. Unless otherwise stated, a
reimbursing bank's charges are for the account of the
a) Issuing
bank
b) Claiming
bank
c) Beneficiary
Ans: a.
190. If the claiming bank
indicates additional charges in the reimbursement claim, those charges will be
a) In
addition to the amount of authorization
b) Deducted
from the amount of authorization
c) Will
not be honored
Ans: a.
191. Who bears the risk of any ambiguity in its
instruction to issue or amend a credit as per paragraph 2
of ISBP?
a) Issuing Bank
b) Negotiating
Bank
c) Beneficiary
d) Applicant
Ans: d
192.
Document issued and marked as “Duplicate’’ will be regarded as
a) Original Document
b) Copy Document
Ans: a
193. Detailed mathematical calculations in
documents will be checked by banks
a) True
b) False
Ans: b
194. Corrections and alterations in documents
issued by the beneficiary which have not been legalized,
visaed, certified or similar, need not be
authenticated except:
a) Certificate of Origin
b) Invoice.
c) Draft
d) Packing List..
Ans: c.
195. Description as “model 234” instead of “model
432” in commercial invoice would not be regarded as
a typing error and would constitute a
discrepancy.
a) False
b) True
Ans: b.
196. As per ISBP which statement is correct:
a. Copies of
documents need not be signed.
b. Copies of
documents may not be signed.
c. Copies of
documents must not be signed.
d. Copies
of documents should not be signed.
Ans: a.
197. “Invoice”, “One Invoice” or “Invoice in 1
copy”, it will be understood to be a requirement for an:
1. Copy Invoice.
2. Original
invoice.
3. Invoice in
original Stationery.
4. Invoice
produced by a telefex machine.
Which of the following is correct?
a) B
b) A & B
c) B & D
d) B
& C
Ans: d.
198. A credit subject to UCP 600 specified a
reimbursement instruction that reads:
"Upon receipt of full set of documents in conformity with the
letter of credit terms and conditions,
we will effect payment as per your
instructions".
Compliant presentation was made to the nominated negotiating bank which
was not negotiated by
the nominated bank and claimed for
reimbursements.
The Documents were however lost in transit by the courier company. The
issuing bank refused
reimbursement because reimbursement would only be
effective
"upon receipt of documents" as specified in the reimbursement
instruction quoted above.
Is the issuing bank correct in its refusal decision?
a) Yes
b) No.
Ans: b.
199. A
credit requires an 'invoice' without further definition. Which of the following
MUST be considered a discrepancy?
a. Presentation
of a document identified as a tax invoice.
b. An invoice
which is not signed.
c. An invoice
made out in a different currency to the credit.
d. An invoice
issued for an amount in excess of that permitted by the credit.
Ans: c.
200. If Additional information given in “shipping
marks” such as the type of goods, warnings as to the
handling of fragile goods, net and/or gross
weight of the goods, etc. will be a discrepancy.
a) Yes
b) No.
Ans: b.
201. Shipping Documents means?
a. All Documents
except Bill of Lading
b. All Documents
except Transport Document
c. All Documents
except Draft
d. Only transport
Documents
Ans: c.
201. Exporting country Means?
a. The country of
origin of the goods.
b. The country
from which shipment or dispatch is made.
c. The country
from where the beneficiary is domiciled.
d. Country of
receipt by the carrier.
e. All of the
above except ‘D’.
f. All
of the above A, B, C, D,.
Ans: f.
202. Which documents must be dated even if a
credit does not expressly so require:
a) Invoice, draft &
certificate of origin.
b) Draft, transport
documents and insurance documents.
c) Invoice, packing list
& beneficiary certificate
d) Insurance cover
note, packing list & inspection certificate.
Ans: b.
203. Which of the following statement is
appropriate as per ISBP.
a. The draft should be
drawn by the beneficiary.
b. The draft must be
drawn by the beneficiary.
c. The draft may not be
drawn by the beneficiary.
d. The draft must not be
drawn by the beneficiary.
Ans: b.
204. L/C requires exactly 110% of insurance
coverage, as per UCP a beneficiary can provide insurance
coverage more than 110%.
a) True
b) False
Ans: b.
205. "One copy of Invoice", it will be
satisfied by presentation of :
a) a copy of an invoice.
b) an original of an
invoice.
c) either a copy or an
original
d) Above all.
Ans: d.
206. Which
Document is not a Shipping document as per ISBP?
a. Bill of Lading
b. Certificate of
Origin.
c. Bill of
Exchange.
d. Commercial
Invoice.
Ans:
c.
208. Alteration on a draft must authenticate by
drawer?
a) True
b) False
Ans: a.
209. Bill of lading bearing a clause that the
packaging is not sufficient for sea Journey which one of the
following is correct?
a) Claused B/L
b) Clean B/L
c) None
of the above.
Ans: a.
210. A credit states that, Freight Forwarder’s
Multimodal transport document is acceptable. In this case
name of the carrier is not necessary to show in
the B/L.
a. True
b. False
Ans: a.
211. L/C requires a Document to be prepared at
least 2 days before the B/L Date. B/L presented dated
15.12.2011. Which or the following is correct:
a. Document dated
11.12.2011
b. Documents dated
01.12.2011
c. Document dated
12.12.2011
d. Above all
Ans: d.
212. Which one of the following is not Original;
a. Issued on the
documents Issuers original Stationary
b. Typed Document
c. Perforated
d. Produced on a Telefax
machine
Ans: d.
213. Description of the goods must be stated in
AWB.
a. True
b. False
Ans:b.
214. A straight Bill of Lading is not negotiable.
a. True
b. False
Ans: a.
215. An Insurance Document is subject to an
Expiry Date for Claim.
a. True
b. False
Ans: b.
Further related Articles:
Author Bio
Kazi Suhel Tanvir Mahmud
Trade Finance & Letter of Credit Specialist
Inco-Terms – Trade Finance Insights
AVP & Operations Manager, AB Bank Limited, Bangladesh.
With 24+ years of banking experience (17 years in trade finance), he specializes in letters of credit, discrepancy handling, shipping documentation, and UCP 600 compliance. He supports exporters, importers, and banking professionals in executing risk-controlled cross-border transactions.
Expert in UCP 600 | Documentary Credits | Trade Finance Operations
Explore my latest insights on UCP 600, documentary credits, and real-world trade finance practice
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Last update: 07 May2026