CDCS Sample Test 5/25 with Answers

1. Letter of credit issued by the issuing bank does not expressly states that it is subject to UCP 600 rules

         

a) Advising bank may advise the same to the beneficiary after authentication

b) Advising bank should ignore L/c received

c) Advising bank may advise the credit to beneficiary after authentication and

    may seek clarification from the issuing bank

d) A  or C

2. UCP 600 uses terms like "banks", "banking days" and "international standard banking practice". Would this imply that UCP 600 couldn't be applicable to credits issued by non-banks?

a) Yes

b) No

3. Are domestic letters of credit covered under the UCP rules or not ?

a) Yes

b) No

4. If letter of credit is silent about applicable rules, which rules will apply ?

a) Latest version of UCP 600

b) UCP 500

c) Not subject ICC rules

5. Can a non-bank can issue a letter of credit subject ICC rules under UCP 600 ?

a) Yes

b) No

6. We issued letter of credit by SWIFT before 1^st of July 2007 stating that it is subject to “UCP LATEST VERSION”. When we receive documents under this credit after July 1^st 2007, which version of UCP will the credit be subject UCP 500 or UCP 600 ?

a) UCP 500

b) UCP 600

c) Seek clarification from applicant

7. An issuing bank becomes bound by the terms of an amendment to a documentary credit at the time at which the :

a) Beneficiary accepts the amendment whether expressly or by implication

b) Reimbursing bank agrees to the applicant’s request for an amendment

c) Advising bank advises the amendment to the beneficiary

d) Issuing bank issues the amendment to the advising bank

8. Letter of credit issued on 20^th December 2008 indicates latest of date of shipment as : “immediate”.  L/c expiry date is 30^th April 2009 and period for presentation is 15 days

a) Beneficiary must ship the goods on or before 30th April 2009

b) Beneficiary must ship the goods on or before 15th April 2009

c) Beneficiary must effect shipment within 21 days

d) Beneficiary must effect shipment within a 5 banking days

9. L/c requires presentation of certificate of origin issued by local chamber of commerce.

a) Certificate of origin must show title as “certificate of origin issued by Local

    chamber of commerce  and must evidence certificate of origin issued by

    chamber of commerce at  beneficiary’s place

b) Certificate of origin may show title as “certificate of origin” but must evidence

    the such certificate is issued by a chamber of commerce at place of

    dispatch/taking in charge/shipment

c) Certificate of origin presented need not be titled but must be issued by chamber

    of commerce of the same country

d) All above are incorrect

10. L/c requires shipment advise must be sent to applicant as soon as possible after shipment and beneficiary certificate to this effect to be presented

a) Beneficiary sent shipment advise within 5 banking days upon shipment and

    certificate presented to this effect

b) Beneficiary sent shipment advise within 10 days but certificate presented

    evidences that shipment advise has been sent as soon as possible

c) Beneficiary sent shipment advise on the same day of shipment and certified

    that shipment advise has been sent on the same day

d) All above are incorrect

11. As per L/c dated 1st Dec 2008, shipment to be effected between 10th of Dec 2008 and  20th of Dec 2008.

a) Beneficiary must effect shipment on or before 20th Dec 2008

b) Shipment effected any day between 11th of Dec to 20th of Dec acceptable

c) Shipment effected any day between 10th of Dec to 20th of Dec acceptable

d) Only A is incorrect

12. L/c requires shipment to be effected “On or about 25th of Dec 2008. 25th Dec 2008 is closed due to Christmas in beneficiary’s country.

a) Shipment effected between 21st Dec and 30st Dec acceptable

b) Shipment effected between 20th Dec and 31st Dec acceptable

c) Shipment effected on 25th Dec is acceptable

d) A & C correct

13. Prior to advising a documentary credit to the beneficiary, the advising bank is responsible for :

a) Effecting payment against conforming documents

b) Checking the apparent authenticity of the documentary credit

c) Notifying the issuing bank that the documentary credit is being advised

d) Checking that the reimbursement method is effective?

14. A documentary credit states that shipment must be made on or about 27^th June. Which of the following shipment dates would be acceptable?

1) 20^th June

2) 27^th June

3) 02^nd July

4) 03^rd July

a) 1 and 2 only

b) 1 and 4 only

c) 2 and 3 only

d) 3 and 4 only

15. Latest date of shipment as per L/c  is : “by end of Dec 2008.

a) Shipment only to be effected between 21st Dec and 31st Dec

b) Shipment only to be effected between 20th Dec and 31st Dec

c) Shipment may be effected on or before 31st Dec 2008

d) Shipment only to be effected 25th Dec to 31st Dec 2008

16. As per L/c issued on 12^th Feb 2009, latest date of shipment was “On or about” 15^th March 2009. Which of the following is the shipment under the L/c ?

a) 10^th to 20^th of Mar 2009

b) 11^th to 19^th of  Mar 2009

c) Any time before 15^th of March 2009

d) None of the above correct

17. Which of the following is correct option for the second half of Feb 2008

a) 16^th to 28^th Feb

b) 15^th to 28^th Feb

c) 11^th to 20^th Feb

d) 16^th to 29^th Feb

18. If an L/c states shipment to be effected on or about 06 March, it will mean shipment to be effected between

a) 01st March – 11^th March

b) 01^st March – 10^th March

c) 02 March – 11^th March

d) Any time on or before 06 March

19. Which of the following statement is true?

a) If an L/c states shipment to be effected on the first half of March it will mean   

    Ist -16^th of the March

b) If an L/c states shipment to be effected at the end of March, it will mean 20^th to

    31^st March

c) If an L/c states shipment to be effected in the middle of March, it will mean 11^th

     to 20^th of March

d) All of the above

20. For instalment shipment, L/c says, there must be 20 days difference between two shipments. Which of the following comply:

a) Ist shipment on 1^st Jan & 2^nd shipment 21^st Jan

b) Ist shipment on 1^st Jan & 2^nd shipment 19th Jan

c) Ist shipment on 1^st Jan & 2^nd shipment 20th Jan

d) None of above

21. Applicant of the credit, require to include copy of proforma invoice as an integral part of the credit.

a) Issuing may include the same as required by the credit without any hesitation

b) Issuing may should discourage applicant but may include if applicant insist for

    the same

c) Issuing bank should refuse to include proforma invoice as an integral part of the

   credit

d) Only C above is correct

22. A confirming bank has advised an amendment but remained silent about confirmation status of that particular amendment. What can be inferred from such action of the confirming bank?

a) The amendment is confirmed

b) The amendment is not confirmed

c) Beneficiary must seek clarification from the confirming bank

d) None

23. Can a name of the applicant be changed after it has been issued through amendment

a) Yes

b) No

24. If a letter of credit calls for an invoice to be certified by chamber of commerce

a) Invoice should bear the stamp of chamber of commerce

b) Invoice should be signed by chamber of commerce

c) Invoice should have a label of chamber of commerce

d) Any of the above will suffice

25. A documentary credit states shipment should be made on or about 10^th Mar 09. Which of the following shipment dates are NOT acceptable

a) 04 Mar 09

b) 07 Mar 09

c) 14 Mar 09

d) 10 Mar 09

ANSWERS

1. D
2. B
3. A
4. C
5. A
6. A
7. D
8. A
9. D
10. B
11. D
12. D
13. B
14. C
15. A
16. A
17. D
18. A
19. C
20. A
21. B
22. A
23. A
24. D
25. A