INCOTERMS EXAM QUESTIONS AND
ANSWERS
EXW - answer- Exworks: Insurance covered by the buyer. Buyer bears risk during
whole transport.
FCA - answer- Free carrier: insurance covered by seller up to the first
carrier/terminal. Buyer bears all risk after goods have been delivered to the agreed
place
FAS - answer- Free alongside ship: sea only. Seller bears risk until cargo is beside
the ship at the port of shipment, after which the buyer bears all costs and risks
FOB - answer- Free on board: sea only. Seller bears risks and costs until the goods
are on boad the ship at the port, after which the buyer bears all risk and cost
CFR - answer- Cost and freight: sea only. Seller bears risk until goos are on board
ship and bears costs until the goods have reached the port @the destination. Buyer
bears risk after goods are on board ship, and bears cost once the goods have
reached destination port
CIF - answer- Cost, insurance and freight: sea only. Seller's risk ends when goods
are on board ship at port of origin. Insurance must be covered by the seller, in favor
of the buyer, through to the destination port. Buyer is at risk once the goods are on
board the ship at origin port, but insurance and costs are covered by buyer up to the
destination port.
CPT - answer- Carriage paid to:Insurance covered by the buyer once goods have
reached the first carrier. Buyer takes risk once goods are at the first carrier/agreed
time and place. Costs and documents are sellers responsibility up to destination
customs
CIP - answer- Carriage and insurance paid to: Insurance must be covered by the
seller, in favor of the buyer, through to place of destination, buyer bears risk after
goods have been delivered to first carrier. Costs and documents are sellers
responsibility up to destination customs
DAP - answer- Delivered at place: seller bears risk and covers insurance up to the
place of destination (enters customs). Further transport costs and risk falls on the
buyer.
DAT - answer- Delivered at terminal: buyer is at risk once the goods have been
delivered to an agreed terminal, unloaded, not cleared for import with duties unpaid.
Seller takes Risk/insurance until customs is cleared.
ANSWERS
EXW - answer- Exworks: Insurance covered by the buyer. Buyer bears risk during
whole transport.
FCA - answer- Free carrier: insurance covered by seller up to the first
carrier/terminal. Buyer bears all risk after goods have been delivered to the agreed
place
FAS - answer- Free alongside ship: sea only. Seller bears risk until cargo is beside
the ship at the port of shipment, after which the buyer bears all costs and risks
FOB - answer- Free on board: sea only. Seller bears risks and costs until the goods
are on boad the ship at the port, after which the buyer bears all risk and cost
CFR - answer- Cost and freight: sea only. Seller bears risk until goos are on board
ship and bears costs until the goods have reached the port @the destination. Buyer
bears risk after goods are on board ship, and bears cost once the goods have
reached destination port
CIF - answer- Cost, insurance and freight: sea only. Seller's risk ends when goods
are on board ship at port of origin. Insurance must be covered by the seller, in favor
of the buyer, through to the destination port. Buyer is at risk once the goods are on
board the ship at origin port, but insurance and costs are covered by buyer up to the
destination port.
CPT - answer- Carriage paid to:Insurance covered by the buyer once goods have
reached the first carrier. Buyer takes risk once goods are at the first carrier/agreed
time and place. Costs and documents are sellers responsibility up to destination
customs
CIP - answer- Carriage and insurance paid to: Insurance must be covered by the
seller, in favor of the buyer, through to place of destination, buyer bears risk after
goods have been delivered to first carrier. Costs and documents are sellers
responsibility up to destination customs
DAP - answer- Delivered at place: seller bears risk and covers insurance up to the
place of destination (enters customs). Further transport costs and risk falls on the
buyer.
DAT - answer- Delivered at terminal: buyer is at risk once the goods have been
delivered to an agreed terminal, unloaded, not cleared for import with duties unpaid.
Seller takes Risk/insurance until customs is cleared.
