In international trade, documentary credit is also known as?

Assessment: JAMB UTME - Commerce - 2004 Subject: Commerce

Question 1 Report

In international trade, documentary credit is also known as?
Answer Details
In international trade, documentary credit is also known as "letters of credit." It is a financial instrument issued by a bank on behalf of the importer (buyer) to guarantee payment to the exporter (seller) for goods or services rendered. The bank acts as an intermediary between the two parties and ensures that the terms and conditions of the sale are met before releasing the payment. This provides security for both parties and reduces the risk of non-payment or fraud in international trade transactions.
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