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CDCS 2015

Chapter Wise Practice Questions

Chapter 1
Discrepant documents under a LC are received by the nominated bank. The
nominated bank requests the issuing bank for authority to pay. Which of the
following is the BEST course of action for the issuing bank?
A. If the discrepancies are acceptable to the issuing bank, the issuing bank
need not refer the discrepancies to the applicant
B. The issuing bank should refer the discrepancies to the applicant for their
approval
C. The issuing bank must reply to the nominated bank within 5 banking days
following the date of receipt of such request
D. An issuing bank need not check documents for compliance if it authorizes
the nominated bank to pay
B. The issuing bank should refer the
discrepancies to the applicant for
their approval

Chapter 1
What triggers settlement under a documentary credit?
a. evidence of shipment of the goods;
b. letter of introduction;
c. handing over of the documents to an applicant;
d. presentation of complying documents by the
beneficiary.

The correct answer is d.


It is only when a complying presentation is made to a
nominated
bank, confirming bank or issuing bank that honour or
negotiation
may or will take place. See UCP 600 sub-articles 7 (a) and 8
(a),
and article 12.

Chapter 1
Who is it that undertakes to make payment under a documentary
credit?
a. The applicant.
b. The advising bank.
c. The issuing bank.
d. The nominated bank.

The correct answer is c.


It is the issuing bank that undertakes to honour a complying
presentation that is made by or on behalf of the beneficiary. See
UCP 600 sub-article 7 (a).

Chapter 1
Which one of the following is not a party to a documentary credit?
a. The confirming bank.
b. The beneficiary.
c. The applicant.
d. The issuing bank.

The correct answer is c.


An applicant is not a party to a documentary credit. A
documentary credit constitutes an undertaking of a bank (issuingbank) and
once issued cannot be amended or cancelled without
the agreement of the beneficiary.

Chapter 1
Name the main purpose of a documentary credit.
a. To undertake payment to a beneficiary.
b. To give shipping instructions to a beneficiary.
c. To eliminate risk in performance under the purchase or
sale contract.
d. To ensure the applicant receives transport documents.

The correct answer is a.


The documentary credit acts as an undertaking addressed to the
beneficiary and removes the payment risk of the applicant.

Chapter 1
Which of the following settlement types are associated with the
definition of honour?
A. Payment.
B. Acceptance.
C. Deferred payment.
D. Negotiation.
a. A, C and D
b. A, B and C
c. A, B and D
d. B, C and D

The correct answer is b.


UCP 600 article 2 defines honour as to pay at sight if the credit
is available by sight payment; to incur a deferred payment
undertaking and pay at maturity if the credit is available by
deferred payment; and to accept a bill of exchange ("draft")
drawn by the beneficiary and pay at maturity if the credit is
available by acceptance.

Chapter 2

Which of the following statements about bill of exchange are correct?


I. They are used as instruments to extend long term credit
II. They are used as security for payment
III. They are used as instruments to extend short term credit
IV. They are used only in international Trade
Options:
A. I and II
B. II and III
C. III and IV
D. I and IV
B. II and III

Chapter 2
An applicant should apply for a letter of credit
I. As detailed in the agreement between the applicant and beneficiary
II. Before the latest shipment date specified in the credit
III. Before the expiry date specified in the credit
IV. As detailed in the agreement between the applicant and issuing bank
Options:
A. I and II
B. II and III
C. I, II and III
D. II, III and IV

C. I, II and III

Chapter 2

What is the difference between a bill of exchange and a promissory note?


A. A bill of exchange is drawn by the seller, while promissory note is drawn by
the buyer
B. A bill of exchange is conditional upon fulfillment of the commercial
contract, while promissory note is not
C. A promissory note is conditional upon fulfillment of the commercial
contract, while bill of exchange is not
D. A bill of exchange is a financial documents whereas a promissory note is a
commercial document

A. A bill of exchange is drawn by the


seller, while promissory note is drawn
by the buyer

Chapter 2
Which of the following Incoterms is SUITABLE for all forms of transport?
A. Cost and Freight
B. Free Alongside ship
C. Delivered at Terminal
D. Free On Board

C. Delivered at Terminal

Chapter 2

Which of the following detail is NOT a must in a bill of exchange?


A. Drawee
B. Tenor
C. Currency & Amount
D. Drawers endorsement

D. Drawers endorsement

Chapter 2
Which of the following statement regarding forfaiting are TRUE?
I. It is an arrangement between by means of which the seller receives
payment for export receivables from the lender without recourse
II. It is a device used for long term financing
III. Rights to payment under letters of credit are accepted as security
IV. It is a guarantee given by the lender to pay the seller in case the buyer
defaults
Options:
A. I and II
B. I and III
C. I, II and III
D. II, III and IV
B. I and III

Chapter 2

A credit which calls for a draft at 10 days after shipment, requires


shipment from Any Indian Port. One B/L is presented showing two
onboard notations. On board vessel A 01 April XX from Kolkatta and On
board vessel B 03 April XX from Chennai (Kolkatta and Chennai are both
ports in India). The maturity date of the draft is:
A. 10 April XX
B. 11 April XX
C. 12 April XX
D. 13 April XX

B. 11 April XX

Chapter 2

Which of the following is TRUE about the Incoterms CFR?


A. Transfer of risk occurs at the port of loading
B. The buyer enters into the contract of carriage with the main carrier
C. The seller pays unloading cost if separate from the main carriage cost
D. The term can be used for all modes of transport

A. Transfer of risk occurs at the port of loading

Chapter 2
Which of the following is NOT a risk to a beneficiary with regard to an
unconfirmed credit?
A. Failure to comply with credit conditions
B. Insolvency of issuing bank
C. Loss of goods in transit
D. None of the above

C. Loss of goods in transit

Chapter 2

In a L/C calling for a Bill of Lading on CFR basis, which of the following is
acceptable
A. Shipped on board with freight pre-payable
B. Shipped on board with freight to be paid
C. Shipped on board with freight prepaid and destination charges collect
D. Received for shipment with freight prepaid and destination charges to
pay
C. Shipped on board with freight prepaid and destination
charges collect

Chapter 2
Your customer is an exporter. Which payment term
exposes it to
least risk?
a. Open account.
b. Documentary credit.
c. Payment in advance.
d. Documentary collection.

The correct answer is c.


To receive payment in advance
removes all payment risk from
the beneficiary.

Chapter 2
Your customer is an importer. Which payment term exposes it to
least risk?
a. Open account.
b. Documentary credit.
c. Payment in advance.
d. Documentary collection.

The correct answer is a.


In an open account transaction, an
importer is not required to
make any payment until the goods
and documents are received
by it.

Chapter 2

An exporter sells goods overseas on FOB and CIF Incoterms


respectively. Who is responsible for the freight charges in each?
a. Importer (FOB) / exporter (CIF).
b. Importer (FOB) / importer (CIF).
c. Exporter (FOB) / importer (CIF).
d. Exporter (FOB) / exporter (CIF).

The correct answer is a.


In an FOB transaction, freight will be
payable at destination (by
the importer); in a CIF transaction,
freight will be paid before
shipment (by the exporter).

Chapter 2
Under FOB terms and the UCP, a bill of lading would be
required
to state:
a. shipped on board and freight paid;
b. received for shipment and freight paid;
c. shipped on board and freight payable at destination;
d. received for shipment and freight payable at
destination.

The correct answer is c.


UCP 600 article 20 requires that a bill
of lading indicate that the
goods have been shipped on board.
Under FOB terms, the bill of
lading will be marked freight payable
at destination.

Chapter 2

Incoterm CIF means:


a. carriage, insurance and freight;
b. cost, insurance and freight;
c. cost including freight;
d. charges, insurance and freight.

The correct answer is b.


The definition of CIF in Incoterms
2010 is that it stands for the
[C]ost of goods, [I]nsurance of the
goods and the [F]reight cost
for the goods.

Chapter 3

A credit issued for USD 20,000 is to revolve on a cumulative basis every


month for 6 months. What is the total liability of the issuing bank?
A. USD 20,000
B. USD 20,000 for each month
C. USD 120,000
D. Indeterminable

C. USD 120,000

Chapter 3

When a bank wants to reduce its risk in a documentary credit transaction, it


should
A. Confirm the LC
B. Request another bank to add confirmation
C. Issue a standby
D. Enter into an syndication agreement

D. Enter into an syndication agreement

Chapter 3
Extract from a LC:
Beneficiary: ABC Co, Taiwan
Documents required: 1. Certificate of Origin issued by the manufacturer
2. Inspection Certificate issued by a competent authority in the exporting
country
The beneficiary presented the following documents:
I. Certificate of origin issued by a Chamber of Commerce mentioning the
name of the manufacturer
II. Inspection Certificate issued by XYZ Co in China
III. Invoice showing manufacturer as XYZ Co, China
Options:
A. Documents I and II are not acceptable
B. Documents I and II are acceptable
C. Document I is acceptable but II is not
D. Document II is acceptable but I is not
B. Documents I and II are acceptable

Chapter 3
Your client (the beneficiary) received the following amendment:
- LC amount is decreased from US$ 100,000 to US$ 90,000
- Inspection Certificate is required from SGS instead of Ministry of Agriculture
What options does your client have in terms of document presentation?
A. Reject the amendment in writing. If not, it is assumed the amendment is
acceptable
B. Present documents for US$ 100,000 and inspection certificate from SGS
C. Present documents for US$ 90,000 and inspection certificate from Ministry
of Agriculture
D. Present documents for US$ 100,000 and inspection certificate from
Ministry of Agriculture
D. Present documents for US$
100,000 and inspection certificate
from Ministry of Agriculture

Chapter 3
A LC states latest date of shipment as on or about 23 April XX. Which is the
latest date by which shipment has to be effected?
A. 23 April XX
B. 30 April XX
C. 24 April XX
D. 28 April XX

D. 28 April XX

Chapter 3
An irrevocable transferable L/C with following details is issued available with
advising bank
LC amount USD 90,000
Quantity Grade A 400 Pcs @ USD 100, Grade B 500 Pcs @ USD 100
Original L/C requires Insurance Policy for 110 % of invoice value
First beneficiary requested the advising bank to issue two partial transfers as
follows:

Transfer I Grade A 400 Pcs @ USD 50


Transfer II Grade B 500 Pcs @ USD 70
Which is the percentage of insurance cover will you mention in each transfer?
Transfer I Transfer II
A 110% 110 %
B 110% 125%
C 220% 157.14%
D 220% 220%
C 220% 157.14%

Chapter 3
Under a freely negotiable LC, which of the following statements are TRUE?
I. Documents must be presented to the advising bank only
II. Documents may be presented to any bank and it is obliged to negotiate
III. Documents may be presented to any bank but it is not obliged to
negotiate
IV. Documents may be presented directly to the issuing bank
Options:
A. I only
B. I and IV
C. II and IV
D. III and IV

D. III and IV

Chapter 3

A standby subject to ISP 98 is issued with the following clauses:


Beneficiary can claim under the standby by presenting a statement of
default certifying that applicant has not paid invoices within 60 days after
shipment date including invoice no. 123
The beneficiary presents a drawing with the following documents:
- Beneficiarys statement of default which complies with the standby
- Copy of unpaid invoice no. 234
As an issuer of the standby, which of the following is your BEST course of
action?
A. Refuse the presentation as contract reference is different from the
standby
B. Pay the beneficiary
C. Ask beneficiary to change contract reference in the invoice
D. Obtain applicants approval for payment
B. Pay the beneficiary

Chapter 3

Your client has entered into a contract to purchase machine tools from a
producer in a neighboring country. Since the production is a new venture, the
producer wants an advance payment to procure raw material to manufacture
the tools. Which letter of credit will facilitate this transaction?
A. Red clause letter of credit
B. Revolving letter of credit
C. Evergreen letter of credit
D. Installment letter of credit

A. Red clause letter of credit

Chapter 3

If a LC calls for insurance to cover Common Risks, the document


presented
A. Must cover all risks
B. Must cover common risks in the trade
C. Must cover risks at least as per ICC ( C )
D. Can cover any risk(s)

D. Can cover any risk(s)

Chapter 3
As a nominated bank, you wish to negotiate credit compliant documents from
a beneficiary under a sight credit available by negotiation. Which of the
following constitutes negotiation?
I. Make immediate payment to the beneficiary and send documents to the
issuing bank
II. Make payment to the beneficiary after receipt of funds from the issuing
bank
III. Agree to pay the beneficiary after 10 days (you expect to be paid after 14
days)
IV. Seek permission from issuing bank t negotiate the documents
Options:
A. IV only
B. II and III
C. III only
D. I and III

D. I and III

Chapter 3

A credit requires the beneficiary to send one set of non-negotiable


documents within 2 days of shipment. The shipment date is 10 Dec
XX. Which of the following dates are ACCEPTABLE?
I. 08 December XX
II. 13 December XX
III. 12 December XX
IV. 11 December XX
Options:
A. I only
B. III only
C. I, II and IV
D. I, III and IV
D. I, III and IV

Chapter 3

Speed Airways has entered into a contract with your client Green Aircraft
Manufacturing Co. to lease an airplane for 10 years. The lease payment is
due every six months and will be paid directly by Speed Airways through
their bank. Which of the following credits best serves your clients interest
and protects them against the credit risk of Speed Airways?
A. Revolving credit
B. Installment credit
C. Green clause letter of credit
D. Evergreen standby letter of credit

D. Evergreen standby letter of credit

Chapter 3
Your customer imports goods worth 100,000 per annum from
the same suppliers in January each year. Instead of buying all
goods in January they would like to import goods on a monthly
basis. They would like to know if this is possible under a
documentary credit. Can you suggest what type of documentary
credit will suit their requirements?
a. Revocable letter of credit.
b. Transferable letter of credit.
c. Clean letter of credit.
d. Revolving letter of credit.

The correct answer is d.


What is being described is a revolving credit, ie one that revolves
for a similar amount on certain stated conditions.

Chapter 3
Which type of documentary credit provides a
preshipment facility
to the beneficiary?
a. Irrevocable credit.
b. Confirmed credit.
c. Red clause credit.
d. Revolving credit.

The correct answer is c.


A credit may provide for the beneficiary to receive an advance
payment for part of the credit value. This was traditionally known
as a red clause due to the fact that it was typed onto a letter
of credit in red ink. Today, with documentary credits being
transmitted primarily by SWIFT message, a clause in red ink is
not possible but the term is still referred to by many bankers.

Chapter 3
Which type of documentary credit will overcome the risk
to a
beneficiary of default by an issuing bank?
a. Standby credit.
b. Irrevocable credit.
c. Confirmed credit.
d. Revolving credit.

The correct answer is c.


By having a documentary credit confirmed by a bank that is
local to the beneficiary, it removes the payment risk of the
issuing bank and places it with a bank that is well known to
the beneficiary and considered to be financially sound.

Chapter 3
A documentary letter of credit is opened at the request of one of
your customers. Is the customer:
a. the exporter;
b. the beneficiary;
c. the importer;
d. the drawer?

The correct answer is c.


The instructing party is the importer or buyer of the goods,
services or performance, and they will be known as the
applicant.

Chapter 3
What is the main benefit of an irrevocable documentary credit to
the beneficiary?
a. Assurance of receipt of goods.
b. Assurance of receipt of payment.
c. Assurance of importers creditworthiness.
d. Assurance of issuing banks creditworthiness.

The correct answer is b.


If the beneficiary provides documents that comply with the terms
and conditions of the documentary credit, a confirming bank (if
any) or an issuing bank will have an obligation to honour or
negotiate.

Chapter 4
A correspondent bank to the issuing bank has not committed
to make payment on behalf of the issuing bank. In this
circumstance, the correspondent bank is acting as:
a. nominated bank;
b. confirming bank;
c. advising bank;
d. advising, nominated and confirming bank

The correct answer is a.


A nominated bank has no obligation
to honour or negotiate under
a documentary credit. An advising
bank may or may not be a
nominated bank See UCP 600 article
12 regarding the role of the
nominated bank.

Chapter 4
Which bank is ultimately responsible for charges under UCP 600?
a. The advising bank.
b. The confirming bank.
c. The issuing bank.
d. The nominated bank.

The correct answer is c.


If the charges of an advising or
confirming bank are not
recoverable from the beneficiary, the
issuing bank remains liable.
See UCP 600 article 37.

Chapter 4
In what circumstances is it not necessary for an advising bank
to take further action to check the apparent authenticity of a
documentary credit?
a. If the documentary credit is received on paper.
b. If the documentary credit is received via SWIFT in MT700
format.
c. If the documentary credit is received by fax.
d. If the documentary credit is received by email.

The correct answer is b.


An MT700 message is automatically
authenticated between the
sending and receiving banks.

Chapter 4
A reimbursing bank has received a reimbursement authorisation
from the issuing bank. There is no request to issue a
reimbursement undertaking to the claiming bank (nominated
bank). Despite not issuing a reimbursement undertaking, a
reimbursing bank is required to honour a reimbursement claim
made by the claiming bank.

A reimbursing bank is under no


obligation to honour any claim
unless a reimbursement undertaking
has been issued by it and
the claim submitted by the claiming
bank is in conformity with
that undertaking.

Chapter 4
Which statement below describes the difference between a
documentary credit available by acceptance and one that is
available by deferred payment?
a. A documentary credit available by acceptance does notrequire
presentation of a bill of exchange and a documentary credit available by
deferred payment requires a bill of exchange.
b. b. A documentary credit available by acceptance requires a bill of
exchange to be presented and a documentary credit available by deferred
payment does not.
c. A documentary credit available by deferred payment can only be issued for
usance terms above 60 days, whereas a documentary credit available by
acceptance can cover any usance period.
d. A documentary credit available by acceptance may be discounted at the
request of the beneficiary and a documentary credit available by deferred
payment may not be discounted at the request of the beneficiary.
The correct answer is b.
Acceptance require the placement of an indication of acceptance
by the drawee on the face of a draft (bill of exchange). The
deferred payment product was developed to cover transactions
where a draft was not required or appropriate, ie due to stamp
duty fees applying to a draft.

Chapter 5
Which of these is not the responsibility of the nominated bank /
confirming bank?
a. To prepare documents for presentation.
b. To examine documents.
c. To handle discrepant documents.
d. To advise the beneficiary of any decisions with respect
to documents.

The correct answer is a.


The preparation of documents is a task for the beneficiary and
other entities that are required to produce documents on their
behalf, ie transport and insurance documents. Although some
banks provide a document preparation service to their clients,
this is not a primary function of a nominated or confirming bank.

Chapter 5
Which of these is not a risk faced by a beneficiary in a
documentary credit?
a. Failure of the issuing bank.
b. Failure of the applicant to pay.
c. Failure of the beneficiary to prepare compliant
documents.
d. Failure of the issuer, in the event that the documentary
credit is issued by a non-bank.

The correct answer is b.


As a bank has issued a documentary credit, it is that banks
payment risk that must be considered by the beneficiary. The
issuing bank has, effectively, replaced the payment risk of the
applicant with its own.

Chapter 5
Any advising bank is responsible for which of the following?
a. Ensuring that the credit or amendment is genuine.
b. Honour or negotiation if a complying presentation is
made.
c. Ensuring that the credit or amendment is apparently
authentic.
d. Requesting any amendments of the issuing bank on
behalf of the beneficiary.

The correct answer is c.


This aspect is covered in UCP 600
article 9.

Chapter 6
A credit issued by Bank A, available with Bank B by Payment included the
expiry date as 04 February XX. The beneficiary couriered documents to Bank
B on 31 January XX. However on account of a general strike, Bank B was
unable to receive and process documents. The beneficiary re-routed the
documents directly to Bank A which was received by them on 5th February
XX. Which of the following statements reflects Bank As position?
A. Bank A must pay the beneficiary if documents are credit compliant
B. Bank A is not obliged to pay, since the documents were presented after
expiry date
C. Bank A is not obliged to pay since the documents were not presented
through the nominated bank
D. Bank A must request the beneficiary to re-present documents to Bank B
for payment
B. Bank A is not obliged to pay, since
the documents were presented after
expiry date

Chapter 6

Which of the following transport document has the capacity to fulfill the three
functions listed below?
- Evidence receipt of goods by carrier
- Evidence the contract of carriage
- Convey title to the goods
Options:
A. Airway Bill
B. Seaway Bill
C. Truck Receipt
D. Marine Bill of Lading
D. Marine Bill of Lading

Chapter 6
Bank I (the issuing bank) received documents on 11 March XX (Tuesday) and
found the documents to be discrepant. Which of the following notices sent by
Bank I is / are valid? (Saturdays and Sundays are bank holidays)
A. MT 799 sent on 14 March XX We received your documents presented
under our LC. However we refuse to pay as the documents are discrepant.
Meanwhile we are holding the documents at your disposal
B. MT 799 sent on 18 March XX We refuse your presentation as the
documents contain the following discrepancies: Late shipment, Partial
shipment. We are returning the documents to you by courier
C. MT 799 sent on 13 March XX We have found that the documents contain
discrepancy late shipment. We will effect payment when documents are
accepted by the applicant
D. MT 799 sent on 19 March XX We refuse payment as the documents
contain the discrepancy late shipment. We are holding documents at your
risk and disposal
B. MT 799 sent on 18 March XX We
refuse your presentation as the
documents contain the following
discrepancies: Late shipment, Partial
shipment. We are returning the
documents to you by courier

Chapter 6
Which of the following parties is NOT AUTHORISED to sign a multimodal
transport document?
A. Carrier
B. Master
C. Multimodal Transport Operator
D. Agent of the Master

C. Multimodal Transport Operator

Chapter 8

What purpose does an inspection certificate serve?


A. Ensures goods are of a certain quality and insured?
B. Ensures there is no over invoicing and goods are adequately insured
C. Ensures quality of goods is as per globally acceptable standards
D. Ensures that the goods are of certain quality as requested by the applicant

D. Ensures that the goods are of


certain quality as requested by the
applicant

Chapter 8

The consignor / exporter on the certificate of origin:


A. Must be consistent with shipper on the transport document
B. Must be the same as the beneficiary of the credit
C. May be any party
D. Must either be the shipper on the transport document or the beneficiary

C. May be any party

Chapter 8

If a LC requires a presentation of export license, which of the following


statements are TRUE?
A. It may be issued by the export licensing authority in the country of export
B. It may be issued by the beneficiary and stamped by export licensing
authority
C. It should include certification by export licensing authority allowing the
export of goods
D. All of the above

D. All of the above

Chapter 8
Which of the following statements BEST describes the purpose of a packing
list?
I. To indicate to the applicant and carrier the gross and net weight of the
goods
II. To indicate to the clearing agent the description of goods in each package
III. To enable customs authorities to conduct spot checks on the content of
packages
IV. To satisfy health authorities in the country of import
Options:
A. I and II
B. II and III
C. I and IV
D. I and III
B. II and III

Chapter 9

Extract from a credit:


LC Value: USD 10,000 / Quantity: 100 Kgs / Partial Shipments: Not Allowed
Which of the following presentations are ACCEPTABLE?
A. Invoice showing shipment of 100 Kgs for USD 9,000
B. Invoice showing shipment of 100 Kgs for USD 9,800
C. Invoice showing shipment of 90 Kgs for USD 9,500
D. Invoice showing shipment of 105 Kgs for USD 10,500

B. Invoice showing shipment of 100


Kgs for USD 9,800

Chapter 9
As a nominated bank, which of these should be followed while handling
pending dishonored documents?
I. The documents should be held at the disposal of the applicant
II. The documents should be securely stored
III. The presenter needs to be informed at regular intervals
IV. The presenter need not be informed at regular intervals
Options:
A. I and II
B. I and III
C. II and III
D. II and IV

C. II and III

Chapter 9
Which of the following shipments are acceptable under a credit which
prohibits partial shipment and requires shipment of 1000 boxes of shoes for
about USD 10,000?
I. Shipment consisting of 1000 boxes of shoes for USD 9500
II. Shipment consisting of 950 boxes of shoes for USD 10,000
III. Shipment consisting of 1000 boxes of shoes for USD 11,000
IV. Shipment consisting of 1050 boxes for USD 10,500
Options:
A. I only
B. II and III
C. I and III
D. II and IV

C. I and III

Chapter 10

Which of the following statements is FALSE with regard to URR 725?


A. Unless otherwise it has issued a reimbursement undertaking, a
reimbursing bank is not obliged to honour a reimbursement claim
B. When a bank is not prepared to act in accordance with the
reimbursement authorization, it should advise the issuing bank without
delay
C. When a bank is not prepared to act in accordance with the
reimbursement authorization, it should inform the advising bank of the
credit without delay
D. Issuing banks should not require a sight drafts to be drawn on the
reimbursing bank
C. When a bank is not prepared to act in accordance with the
reimbursement authorization, it should inform the advising bank of the
credit without delay

Chapter 11

If a credit requires that All shipping documents should state the HS Code No,
which of the following is TRUE?
A. The transport documents should evidence HS Code No
B. All documents except drafts should evidence the HS Code No
C. All documents including the drafts should evidence HS Code No
D. Only the invoice should evidence HS Code No

B. All documents except drafts should


evidence the HS Code No

Chapter 11
In which of the following trades is a letter of indemnity commonly seen?
A. Normal commercial transactions
B. Trade manufactured goods
C. Commodity Trade
D. Sale of capital machinery

C. Commodity Trade

Chapter 12
Extract from a LC: Shipment : From any Indian Airport to Chinese Airport
Documents: Full set of airway bills consigned to order of ABC Ltd evidencing
the flight number
Transshipments: Not allowed
Which of the following documents are ACCEPTABLE under this LC?
I. Full set airway bill showing shipment from Chennai to Chinese airport,
consigned to ABC Ltd on Flight No. 172
II. House airway bill showing shipment from Chennai to Shanghai, consigned
to ABC Ltd on Flight No. 172
III. Airway bill showing shipment from Chennai to Shanghai, consigned to
order of ABC Ltd stating Flight No. 172 in Requested Flight box
IV. Airway bill marked Original for shipper showing shipment from Chennai
to Beijing, consigned to ABC Ltd on Flight No. 171 from MAA to SIN and Flight
No. 173 from SIN to PEK (i.e. using IATA codes)
Options:
A. I and II
B. II and III
C. IV only
D. I and IV

C. IV only

Chapter 12

Your client presents documents under a LC which states that shipment is to


be effected in the beginning of February. Which of the following documents
will be ACCEPTABLE?
A. Marine B/L showing date of receipt of goods as 07 February XX
B. A railway bill bearing a reception stamp dated 08 February XX
C. An airway bill evidencing flight date as 15 February XX
D. All of the above

B. A railway bill bearing a reception


stamp dated 08 February XX