Free International Business -II 03 Practice Test - 11th Grade - Commerce 

Question 1

A___ is a letter from a bank guaranteeing that a buyer will pay the seller on time. 

A.

Bill of lading

B.

Letter of credit 

C.

Bill of entry 

D.

None of the above

SOLUTION

Solution : B

A letter of credit is a letter from a bank guaranteeing that a buyer will pay the seller on time. If the bank is unable to make payment, the bank will be requrired to cover the unpaid amount. 

Question 2

The Import Export Code is issued by the Regional Licensing Authority. 

A.

True 

B.

False

SOLUTION

Solution : B

False. The Import Export Code is issued by the Regional Import Export Licensing Authority, which is fall under the Ministry of Commerce and Industries. 

Question 3

Does Export Credit Guarantee Corporation help exporters with financial assistance? 

A.

Yes

B.

No

SOLUTION

Solution : A

Yes. Export Credit Guarantee Corporation help exporters with financial assistance. It protects exporters payments from political and commercial risks. 

Question 4

A proforma invoice ensures that the buyer will receive the best quality of goods. 

A.

True 

B.

False

SOLUTION

Solution : A

True. A proforma invoice ensures that the buyer will receive the best quality of goods. 

Question 5

Which of the pre-shipment inspections takes place, where the orders are checked when the consignments are ready for dispatch. 

A.

In-process quality control 

B.

Consignmentwise inspection   

C.

Self-certification 

D.

All of the above

SOLUTION

Solution : B

When the orders are checked when the consignments are ready for dispatch. This is called Consignmentwise Inspection. 

Question 6

In self-certification there is no inspection required all the time. 

A.

True 

B.

False

SOLUTION

Solution : B

False. In self-certification, quality organisations audit the quality of records frequently to make sure the standards are intact. 

Question 7

Certificate of Origin is a proof that goods are actually being manufactured or procured in the country from where these goods are imported. 

A.

True

B.

False

SOLUTION

Solution : B

False. Certificate of Origin is a proof that goods are actually being manufactured or procured in the country from where these goods are exported. The buyers need a certificate stating that goods have been originated from the home country. 

Question 8

Which of the transportation of cross borders is more prevalent. 

A.

Airways 

B.

Seaways

C. Roadways
D. All of these

SOLUTION

Solution : B

Seaways transportation is more prevalent. 

Question 9

At the gates of the doc, the agent has to hand over a few documents and then only he has the permission to enter. 

A.

Indent

B.

Carting Order

C.

Mate's Receipt 

D.

Certificate of Inspection 

SOLUTION

Solution : B

At the gates of the doc, the agent has to hand over a few documents and then only he has the permission to enter. This is called carting order. 

Question 10

Bill of Lading acts as an acknowledgement of receipt of goods. 

A.

True 

B.

False

SOLUTION

Solution : A

True. Bill of Lading acts as an acknowledgement of receipt of goods. It is a document of title to goods and a contract of affreightment.