vijay.rathinavel

 Profile Answers by vijay.rathinavel 

• Mar 10th, 2010

 

A letter of credit is a promise to pay. Banks issue letters of credit as a way to ensure sellers that they will get paid as long as they do what they've agreed to do.

Letters of credit are common in international trade because the bank acts as an uninterested party between buyer and seller. For example, importers and exporters might use letters of credit to protect themselves. In addition, communication can be difficult across thousands of miles and different time zones. A letter of credit spells out the details so that everybody's on the same page.

vijay.rathinavel

 Profile Answers by vijay.rathinavel 

• Mar 10th, 2010

 

The Money Behind a Letter of Credit.
A bank promises to pay on behalf of a customer, but where does the money come from? The bank will only issue a letter of credit if they know the buyer will pay. Some buyers have to deposit (or already have) enough money to cover the letter of credit, and some customers use a line of credit with the bank. Sellers must trust that the bank issuing the letter of credit is legitimate.

babymel

 Profile Answers by babymel Questions by babymel

• Mar 11th, 2010

 

Do you book bonus as gross amount in your books or do you separate it by net and taxes in a separate account?

shreekunj

 Profile Answers by shreekunj 

• Mar 18th, 2010

 

It is a note which says that paritcular person has took a credit from other person

prashanth Ghodke

 Profile Answers by prashanth Ghodke 

• Mar 21st, 2010

 

Credit purchase means purchase account dr to party account cr.

Sandeep Sahu

• Nov 9th, 2011

 

A letters of credit is a contingent liability of a particular bank and a contingent liability is shown as foot note of the balance sheet