CDCS SAMPLE TEST 03 / 25 with Answers

Test : CDCS/3                                                                         

   

1. Which of the following is not suitable for when FCA term is used?

      

a)         on board bill of lading

b)         tax invoice

c)         forwarder’s cargo receipt

d)         packing list

2.         Which of the following statements about bills of exchange are correct

      

a)         they are used as instruments to extend long term credit

b)         they are used as a security for payment

c)         they are used as instruments to extend short term credit

d)         they are used only in international trade

1.         A & B

2.         B & C

3.         C & D

4.         A & D

3.         Which of the following is NOT true about holder in due course

a)         their rights are affected by disputes in rights and wrongs of the commercial 
            contract

b)         they acquire their right to claim payment through endorsement and delivery

c)         they must have taken the instrument in good faith

d)         they  must have taken the instrument without knowledge of any defects in title

5.         Which party has the MOST responsibility to examine the terms and conditions 

            of a documentary credit against the sales agreement?

A.         Applicant

B.         Beneficiary

C.         Issuing bank

D.         Confirming bank

6.         A documentary credit is a irrevocable undertaking

a)         enforceable against a reimbursing bank even if issuing bank is unable to pay

b)         enforceable against the applicant even if issuing bank is unwilling to pay

c)         enforceable against the nominated bank even if issuing bank is unwilling 
            to pay

d)         enforceable against the issuing bank even if the confirming bank is unwilling 
            to pay

7.         An employee of a nominated bank making payment to a beneficiary 
            under a documentary credit should be aware

            a) The extent to which their bank has agreed to act in its role of nominated 
                 bank

            b) An indemnity has been provided, if the presentation is discrepant

            c) Whether the beneficiary has a separate negotiation facility

            d) Whether any shipment guarantee have been issued under the credit

a.         A&B

b.         A&C

c.         A,C&D

d.         A,B&C

8.         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

9. 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 forwarding agent ?

a)         1 and 3 only

b)         2 and 4 only

c)         1,2 and 3 only

d)         2,3 and 4 only

10. A beneficiary receives an irrevocable documentary credit for which USD 22,500 may be drawn during each month of the  documentary credit’s one year validity. The documentary credit also indicates that reinstatement is on a cumulative          basis. 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, the beneficiary expects to make a final   shipment. What is the maximum value available for this final drawing?

A.         USD 112,500

B.         USD 135,000

C.         USD 157,500

D.         USD 180,000

11.       If an exporter is willing to release the shipping documents directly to the buyer, but wishes to retain some guarantee of payment should the buyer fail to pay on the due date, which of the following documentary credits BEST suits the exporter’s needs?

A.         Transferable

B.         Revolving

C.         Standby

D.         Evergreen

12.  Select the most appropriate statement

a.         The issuing bank must use an advising bank

b.         The issuing bank may use an advising bank

c.         There must be at least two banks in a L/c operations

d.         None

13.       In the case of a non-cumulative revolving documentary credit available for
            USD 10,000 per month and valid for six months, which of the following statements 
            is correct?

1.         The face value of the credit is USD 10,000

2.         The face value of the credit is USD 60,000

3.         The amount(s) not utilized in one month may be carried over to the next

4.         The total undertaking of the issuing bank is USD 60,000

A.         1 and 3 only

B.         1 and 4 only

C.         2 and 3 only

D.         2 and 4 only

14. A cumulative revolving documentary credit is opened with six months' validity and allowing for USD 25,000.00 to be drawn each month. If only the first month's shipment is effected in full, what is the available amount in the fourth month?

A.         USD 0.00.

B.         USD 25,000.00.

C.         USD 75,000.00.

D.         USD 100,000.00

15.       Applicant in his instructions to issue a documentary credit should specify

a)         Terms and conditions which the beneficiary has to comply with to obtain payment under the               sales contract

b)         Terms and conditions which the beneficiary has to comply with to obtain payment under the               documentary credit

c)         Documents to be produced to obtain payment under the documentary credit

d)         All the relevant terms and conditions of the sales contract

1.         A & D

2.         B & C

3.         B, C & D

4.         B & D

Answers

1.         A

2.         B

3.         A

4.         D

5.         B

6.         D

7.         D

8.         B

9.         C

10.       C

11.       C

12.       B

13.       B

14.       C

15.       B