IMS 3310 EXAM 1 QUESTIONS AND ANSWERS
Incoterms - CORRECT ANSWER✅✅Terms and conditions of a sale that stipulate the point at which costs
and risks are borne by the buyer; universal trade terminology developed by the International Chamber
of Commerce.
Ex-Works (EXW) - CORRECT ANSWER✅✅Seller makes goods available at their factory or warehouse,
where risk passes to the buyer.
Free Carrier (FCA) - CORRECT ANSWER✅✅Seller hands over goods to the carrier, where risk passes to
the buyer.
Carriage Paid To (CPT) - CORRECT ANSWER✅✅Seller pays for carriage up to the destination, while risk
passes when goods are handed to the carrier.
Carriage and Insurance Paid To (CIP) - CORRECT ANSWER✅✅Seller pays for carriage and insurance to
the destination, risk passes when goods are handed to the carrier.
Delivered at Terminal (DAT) - CORRECT ANSWER✅✅Seller pays for transport and insurance, carries risk
until goods are unloaded at the terminal.
Delivered at Place (DAP) - CORRECT ANSWER✅✅Seller pays for carriage to the named place and
assumes all risk until goods are unloaded.
Delivered Duty Paid (DDP) - CORRECT ANSWER✅✅Seller delivers goods to the destination and covers
all duties, taxes, and customs clearance.
Free Alongside Ship (FAS) - CORRECT ANSWER✅✅Seller clears goods for export and places them
alongside the ship, risk passes alongside the ship.
Free On Board (FOB) - CORRECT ANSWER✅✅Seller loads goods on the buyer's ship, risk passes at the
ship's rail.
, Cost and Freight (CFR or C&F) - CORRECT ANSWER✅✅Seller pays costs of freight to the destination
port; buyer is responsible for insurance; risk passes at the ship's rail at the loading port.
Cost, Insurance, and Freight (CIF) - CORRECT ANSWER✅✅Same as CFR, but insurance is arranged by the
seller.
Cash in Advance - CORRECT ANSWER✅✅Payment made before shipment; desirable when buyer's
credit is unknown.
Open Account - CORRECT ANSWER✅✅Payment after receipt of goods; offered to reliable buyers in
stable countries; seller assumes all risk.
Consignment - CORRECT ANSWER✅✅Goods shipped to buyer, payment made after sale to a third
party; seller assumes all risk.
Letter of Credit (L/C) - CORRECT ANSWER✅✅Document issued by buyer's bank promising payment
upon receipt of specified documents; payment is almost guaranteed.
Confirmed L/C - CORRECT ANSWER✅✅Confirmation by a correspondent bank in the seller's country
honoring the issuing bank's L/C; payment is 100% guaranteed.
Irrevocable L/C - CORRECT ANSWER✅✅L/C that cannot be changed or canceled without the seller's
consent.
Revolving L/C - CORRECT ANSWER✅✅Allows repetition of the same transaction for a specified amount
once previous payment is made.
Pro Forma Invoice - CORRECT ANSWER✅✅Exporter's formal quotation describing merchandise, price,
delivery time, shipping method, terms of sale, and points of exit/entry.
Export Draft (Bill of Exchange) - CORRECT ANSWER✅✅Written order by seller instructing buyer to pay a
specific sum at a future date or on demand.
Incoterms - CORRECT ANSWER✅✅Terms and conditions of a sale that stipulate the point at which costs
and risks are borne by the buyer; universal trade terminology developed by the International Chamber
of Commerce.
Ex-Works (EXW) - CORRECT ANSWER✅✅Seller makes goods available at their factory or warehouse,
where risk passes to the buyer.
Free Carrier (FCA) - CORRECT ANSWER✅✅Seller hands over goods to the carrier, where risk passes to
the buyer.
Carriage Paid To (CPT) - CORRECT ANSWER✅✅Seller pays for carriage up to the destination, while risk
passes when goods are handed to the carrier.
Carriage and Insurance Paid To (CIP) - CORRECT ANSWER✅✅Seller pays for carriage and insurance to
the destination, risk passes when goods are handed to the carrier.
Delivered at Terminal (DAT) - CORRECT ANSWER✅✅Seller pays for transport and insurance, carries risk
until goods are unloaded at the terminal.
Delivered at Place (DAP) - CORRECT ANSWER✅✅Seller pays for carriage to the named place and
assumes all risk until goods are unloaded.
Delivered Duty Paid (DDP) - CORRECT ANSWER✅✅Seller delivers goods to the destination and covers
all duties, taxes, and customs clearance.
Free Alongside Ship (FAS) - CORRECT ANSWER✅✅Seller clears goods for export and places them
alongside the ship, risk passes alongside the ship.
Free On Board (FOB) - CORRECT ANSWER✅✅Seller loads goods on the buyer's ship, risk passes at the
ship's rail.
, Cost and Freight (CFR or C&F) - CORRECT ANSWER✅✅Seller pays costs of freight to the destination
port; buyer is responsible for insurance; risk passes at the ship's rail at the loading port.
Cost, Insurance, and Freight (CIF) - CORRECT ANSWER✅✅Same as CFR, but insurance is arranged by the
seller.
Cash in Advance - CORRECT ANSWER✅✅Payment made before shipment; desirable when buyer's
credit is unknown.
Open Account - CORRECT ANSWER✅✅Payment after receipt of goods; offered to reliable buyers in
stable countries; seller assumes all risk.
Consignment - CORRECT ANSWER✅✅Goods shipped to buyer, payment made after sale to a third
party; seller assumes all risk.
Letter of Credit (L/C) - CORRECT ANSWER✅✅Document issued by buyer's bank promising payment
upon receipt of specified documents; payment is almost guaranteed.
Confirmed L/C - CORRECT ANSWER✅✅Confirmation by a correspondent bank in the seller's country
honoring the issuing bank's L/C; payment is 100% guaranteed.
Irrevocable L/C - CORRECT ANSWER✅✅L/C that cannot be changed or canceled without the seller's
consent.
Revolving L/C - CORRECT ANSWER✅✅Allows repetition of the same transaction for a specified amount
once previous payment is made.
Pro Forma Invoice - CORRECT ANSWER✅✅Exporter's formal quotation describing merchandise, price,
delivery time, shipping method, terms of sale, and points of exit/entry.
Export Draft (Bill of Exchange) - CORRECT ANSWER✅✅Written order by seller instructing buyer to pay a
specific sum at a future date or on demand.
