A manufacturing company agrees to export tools to a Chinese company using a letter of credit (L/C). Which of the following entities guarantees the payment for the tools?
A manufacturing company agrees to export tools to a Chinese company using a letter of credit (L/C). Which of the following entities guarantees the payment for the tools?
A letter of credit (L/C) is a financial document provided by a bank that guarantees a seller will receive payment up to the amount specified, as long as certain delivery conditions are met. Therefore, the entity that guarantees the payment for the tools in this transaction is a bank.
A. A bank the gurantee is from the issuing bank as it's L/C
The correct answer to this questions is A