INTERNATIONAL BUSINESS

IMPORTANT QUESTIONS

1. After obtaining the import licence, the purchase department of the 'Kobra
Importers India Ltd.' places an order with the 'Japan Exporters' for supply of the
specified items. The import order contains information about the price, quantity,
size, grade and quality of goods ordered and the instructions relating to packing,
shipping, ports of shipment and destination.

Name the step involved in the import transaction:

(a) Trade Enquiry
(b) Obtaining Import Licence
(c) Obtaining Foreign Exchange
(d) Placing an Indent

2. By foreign investment we mean inviting ______ in our country for industrial

development.
(a) Foreign people
(b) Foreign capital
(c) Foreign Material
(d) All of the above

3. Which is the first step of the procedure of import trade?

(a) Obtaining Import Licence
(b) Trade Enquiry
(c) Placing an Order
(d) Sending Letter of Credit

4. In the language of international trade placing order for goods is known as

_____
(a) Import
(b) Export
(c) Indent
(d) Purchase

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IMPORTANT QUESTIONS

5. Which of the following is not the document of import trade?

(a) Indent
(b) Bill of Lading
(c) Invoice
(d) Shipping bill

6. In the customs office ____ is filled for the incomplete information about goods.
(a) Bill of Entry
(b) Bill of Sight
(c) Bill of Lading
(d) Dock Challan

7. _____ is explained in the Indent.

(a) Name of goods
(b) Quality of goods
(c) Price of goods
(d) All of the above

8. An exporter demands _____ from an importer for the satisfaction about the
payment.
(a) Letter of Credit
(b) Bill of Exchange
(c) Advance Payment
(d) Foreign Currency

9. _____ is known as that rate on which the currency of one country is

exchanged with the currency of another country.
(a) Interest Rate
(b) Dividend Rate
(c) Exchange Rate
(d) Discount Rate

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IMPORTANT QUESTIONS

10. To take a full ship on freight is known as _____

(a) Charter Party
(b) Dock Challan
(c) Marine Insurance Policy
(d) Shipping Order

11. What does the importer send to the exporter. After making trade inquiries?
(a) Railway Receipt
(b) Indent
(c) Letter of Credit
(d) Foreign currency

12. If the Indent is incomplete, it shall be called

(a) Open Indent
(b) Closed Indent
(c) Shipping Order
(d) Shipping Bill

13. The WTO was established on _____

(a) 1st January, 1955
(b) 1st January, 1995
(c) 1st January, 2005
(d) 1st January, 2009

14. The headquarters of WTO is at ____

(a) Delhi
(b) London
(c) Singapore
(d) Geneva

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CLASS 11 BUSINESS
 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

15. Which of the following documents is not required in connection with an

import transaction?
(a) Bill of lading
(b) Shipping bill
(c) Certificate of origin
(d) Shipment advice

16. Which one of the following is not a document related to fulfill the customs
formalities
(a) Shipping bill
(b) Export licence
(c) Letter of Insurance
(d) Proforma invoice

17. Which one of the following is not a part of export documents?

(a) Commercial Invoice
(b) Certificate of origin
(c) Bill of entry
(d) Mate's receipt

18. Write notes on Bill of lading, Bills of entry, Shipping advice.

19. Discuss any three advantages of international business.

20. State the reasons to have international business?

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IMPORTANT QUESTIONS

21. What do you mean by International Business?

22. What are the functions of the forwarding agent at Port?

23. What are the Objectives of WTO?

24. Write points of Nature of international business for a country.

25. Write a note on WTO. Explain its main features.

26. What are the main functions of WTO?

27. 'Mathura Importers' appointed Mr. Rahul Mukerji, their Clearing Agent for
getting their imported goods cleared from the port. Rahul had to fill up a form
before depositing the Custom Duty. In the form complete details of the
imported goods had to be filled up. But Rahul had no knowledge/information of
it.
State, in such a situation what would you call the form filled up by Rahul?
Explain with meaning.

28. Mr. Naresh Bhardwaj ordered some goods to a foreign company. In the
order he gave an account of the quantity of goods, their type, price and all
other things related to it. Mr. Ramesh Singla also ordered some goods to a
foreign company. In the order he did not give the account of all things related to
the import of goods.

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 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

State, what do we call the order in the language of Foreign Business? What shall
we call the orders placed by Mr. Naresh and Mr. Ramesh in the language of
Foreign Business?

29. India, known as the home of spices, boasts a long history of trading with the
ancient civilisation of Rome and China. Today, Indian spices are the most
sought- after globally, given their exquisite aroma, texture, taste and medicinal
value. India is the world's largest producer, consumer and exporter of spices; the
country produces about 75 of the 109 varieties and accounts for half of the global
trading in spices.

Top spices produced in the country include pepper, cardamom, chilli, ginger,
turmeric, coriander, cumin, celery, fennel, dill seed, garlic tamarind, clove, and
nutmeg among others Major importers of Indian spices are USA, China, Vietnam,
UAE, Indonesia, Malaysia, UK, Sri Lanka, Saudi Arabia, and Germany.

On the basis of the aforesaid information about spices, answer the following
questions:

a) Enumerate the two benefits available to the Indian business firms who are
engaged in spice export.

b) How do the different nations engaged in trade of spices stands to gain?

30. List the important documents used in Import Trade.

31. List the important documents used in Export Trade.

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 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

32. Discuss the scope of international business.

33. “Foreign trade is not free from difficulties.” Comment.

34. Designco Indian is one of the fastest growing handicrafts export company,
offering customers every choice in terms of materials like wood, glass, cloth, metal
and stone with multiple finishes. Designco provides sophisticated, one-stop-shop
solutions to meet the buyer's specific needs and helps to create a platter of
offerings. The most important innovators in the handicrafts exports market had
recently developed a lot of Brass Chunari This product is considered auspicious
during prayer rituals, religious ceremonies and festival celebration while offering.
prayers to God. Brass Chunari is decorated with multicolored stones, laces,
patches beads, pearls and decorated with brass. The company received an export
order of these chunari from a Thai trader, since company has ready stock of brass
chunari the other formalities need to be completed before reservation of shipping
space. On the basis of the aforesaid information about Designco India, answer the
following questions:

a) What are the various formalities that need to be completed by Designco before
reservation of shipping space?

b) State the document to be issued by shipping company on the receipt of request

for reservation of shipping space.

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IMPORTANT QUESTIONS

35. Balanpur plantations & industries limited, having its headquarters in

Chikmaglur district of Karnataka decided to export coffee beans. For the same
they appointed Nand Exports Clearing Services Ltd. as their C&F agents. Nand
Exports clearing services Ltd., started the entire procedure for exporting the high
quality coffee beans to various parts of Africa. They applied for licence and
arranged the required finance to export beans, got the consignment cleared from
excise and at last they packed the consignment in such a manner that the beans
will remain fresh and necessary forwarding formalities were also completed.

Explain in detail the next steps which have to be followed by Nand Exports
Clearing Services Ltd.

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ANSWERS
1. Answer: (d)

2.Answer: (b)

3. Answer: (b)

4. Answer: (c)

5. Answer: (d)

6. Answer: (b)

7. Answer: (d)

8. Answer: (a)

9. Answer: (c)

10. Answer: (a)

11. Answer: (b)

12.Answer: (a)

13.Answer: (b)

14.Answer: (d)

15. Answer: (b)

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 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

16.Answer: (b)

17. Answer: (c)

Answer 18: The explanations are:

Bill of Lading: The shipping company issues a bill of lading after receiving the
freight, which acts as proof that the goods have been accepted for transport to
the specified destination. This document is referred to as an airway bill when
goods are being shipped by air.

Bill of Entry: The bill of entry is presented to the port authority by the importer
or his representative. The port authority issues the release order after obtaining
the relevant charges. It is prepared by a qualified custom clerk or broker, and is
examined by the customs authorities for its accuracy and conformity with the
tariff and regulation.

Shipping advice: It is a commercial document which is issued by the exporter,

who is the beneficiary of the letter of credit, in order to give shipment details to
the importer who has applied for the letter of credit.

Answer 19: The following are some of the advantages of foreign trade:

Optimum use of resources: Foreign trade helps in the optimum use of natural
resources and avoids wastage’s of resources. It ensures the presence of stable
price by avoiding wide fluctuations in prices. It tries to equalise the world price.

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 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

Increased standard of living: It ensures more production to meet the demand

of the people of different countries. By increased production, it becomes
possible to increase income and the standard of living of its people. It also
increases the standard of living by increasing more employment opportunities.
It enables a country to import those goods which it cannot produce.

Large scale production: It ensures large production because the production is

carried on to meet the demand of its people as well as world market. Large
scale production also ensures a great deal of internal economies which
reduces the cost of production.

Answer 20: Reason for international Business

Unequal Distribution of Natural Resources: Countries cannot manufacture the

same level of quality and at the same cost. This is due to the unequal
distribution of natural resources and differences in productivity levels among
different geographical places.

Varied Differences: There is a disparity between labour productivity and

manufacturing costs. Because of varied socioeconomic, geographical, and
political factors, it varies in each country.

Specialization Advantage: The principle of territorial division of labour can be

applied internationally as well. Most developing countries with plenty of labour,
for example, specialise in producing and exporting clothing.

DEPRICIATION (ACCOUNTS)

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 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

Price Differences: Firms also engage in the export and import of goods due to
the difference in prices of products. They import cheaper things from other
countries and export goods to other countries where they can fetch better
prices for their products.

Answer 21. Meaning of International Business; An individual cannot fulfill all his
requirements by his own sources. He has to exchange the goods and services
with other individuals. In the same manner, a county cannot fulfil all its
requirements by its own sources. In certain cases, it has to depend on other
countries. This dependence of one country upon another is mainly due to odd
distribution of natural resources. Any country can produce any product only as
per the natural resources available in the country. The products produced in
this manner are first consumed internally in a country and the excess is sold to
other countries. For this sale, in exchange. The country purchases the products
which are not available in plenty in that country. The demand and supply is
thus balanced. This business taking place between the two countries is called
international business.

Answer 22. Functions of Forwarding Agent at Port: A forwarding agent has to

perform the following functions at the port:

(i) Obtaining the Shipping Order: After the arrival of the goods at the port, the
Forwarding Agent talks to a shipping company so that the shipping company
reserve some safe place for the goods. After this agreement, the shipping
company issues the shipping order. In the shipping order, the captain of the
ship is instructed to load the goods on the ship mentioned in the shipping order.
If the quantity of the exported goods is too large, then a full ship can be taken
on freight. This agreement is called Charter Party.

CLASS 11 BUSINESS
 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

(ii) Preparing Shipping Bill: For paying the export duty, the forwarding agent
prepares the shipping bill in triplicate. In this shipping bill, quantity of the
goods, price of goods, address of the exporter, address of the importer,
number of the ship, number of items etc. are mentioned. On the basis of the
details furnished in the shipping bill, export duty is determined. After the
payment of the export duty the customs official keeps one copy of the shipping
bill with himself and hands over the remaining two copies to the forwarding
agent.

(iii) Payment of Dock Dues: Permission of dock authorities is required to carry

the goods to the port to load them on the ship. The dock officers give this
permission only after the payment of the dock dues. For paying the dock dues,
dock challan is prepared in duplicate. After paying the dock dues, one copy is
returned to the agent as receipt. Now the port officers arrange for loading the
goods on the ship. At this time, a copy each of the shipping order and the
shipping bill is handed over to them. This makes it clear about the name of the
ship on which the goods are to be loaded and that the export duty has been
paid.

(iv) Obtaining Mate's Receipt: When the goods have been loaded on the ship,
then, the captain of the ship gives a receipt of receiving goods on the ship
which is called Mate's Receipt. This receipt is of two types: If the goods loaded
on the ship were in good condition and packing was good and the captain of
the ship is fully satisfied with that, a clean receipt is issued. Contrary to this, if
the pack of the goods was unsatisfactory, then a foul receipt is issued.

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IMPORTANT QUESTIONS

(v) Bill of Lading: The forwarding agent along with the mate's receipt, goes to
the office of the shipping company. There, he fills the form of the bill of lading
and deposits it along with the mate's receipt in the office of the shipping
company. The officer in-charge keeps the mate's receipt with him and returns
the bill of lading to the forwarding agent after signing it. If the freight of the ship
is to be paid in advance, then the signed bill of lading is received only after
payment of the freight. Details of the goods are mentioned in the bill of lading
as already mentioned in the mate's receipt.

(vi) Insurance of Goods: The forwarding agent makes inquiries from various
insurance companies and after a thorough check, the most suitable company
is instructed to issue the marine insurance policy.

(vii) Advice to the Exporter: After finishing his work completely, the forwarding
agent informs the exporter through an advice letter. Along with the advice
letter, all the required documents, details of the expenses and commission are
also sent.

Answer 23. The following are the objectives of WTO:

(i) To implement the new world trade agreements

(ii) To promote multilateral trade i.e., trade among many nations
(iii) To promote free trade by abolishing tariff and non-tariff barriers
(iv) To promote world trade in a manner that benefits every member country
(v) To ensure that developing countries get a better share in the advantages
resulting from the expansion of international trade corresponding to their
developmental needs
(
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(vi) To remove all hurdles in the way of open world trading system and use
world trade as an effective instrument to boost economic growth
(vii) To enhance competitiveness among all trading partners so as to benefit
consumers
(viii) To increase the level of production and productivity with a view to increase
the level of employment in the world
(ix) To expand and utilise world resources in the most optimum manner
(x) To improve the standard of living of the global population and speed up
economic development of the member nations
(xi) To take special steps for the development of poorest nations.

Answer 24. The nature or features of international business are elucidated by

the following points:

(i) Involvement of Two Countries: Two countries are required to make

international business meaningful and successful. Thus, international business
is possible only when there is a business transaction between two countries.

(ii) Many Bases: There are many bases which help to make this business
possible like unequal distribution of natural resources. Because of this unequal
distribution of natural resources no country is self dependent to produce all the
goods of its own need. It has to take the help of some other nations. In the
same way, varied cost of production encourage international business.

(iii) Language Difference: Every country has its own different language. It is
mandatory for a successful businessman to know the languages of different
nations. Difference of language is the main feature of the nature of this

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business. Knowledge of international languages plays a significant role in the

success of the business.

(iv) Comparatively More Risky: International business involves more risk in

comparison to domestic business. Often, the material comes from a distant
place and that too through the sea route. The glaciers, waves and
climate/environment/weather of the sea can cause great harm to the material.

(v) Government Intervention: International business is totally monitored by the

government. Prior approval of the government is needed before sale-purchase
with a foreign country. Apart from this, licence needs to be taken from time to
time for the export-import of the products.

(vi) Payment in Foreign Currency: Every country has its own different currency.
Arranging foreign currency is one of the most important features of this kind of
business.

Answer 25. Meaning and Establishment of WTO: World Trade Organisation was
formed to promote free trade among its member nations. Its main objective is to
promote multilateral trade (trade among many nations) in goods and services by
eliminating tariff and non-tariff barriers. Eliminating tariff barriers means
removing import duties and eliminating non-tariff barriers means removing
import quotas (quantitative restrictions), import licensing, etc. In eighth round of
General Agreement on Tariffs and Trade (GATT), popularly known as Uruguay
Round, member nations of GATT decided to set up a new organisation, 'World
Trade Organisation' in place of GATT. WTO was formed on 1st January, 1995.
It took over GATT.

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IMPORTANT QUESTIONS

At the time of its establishment WTO had membership of 124 nations. In January,
2021, its membership increased to 164 nations, out of 202 countries in the world,
accounting for 81% of the total nations. India is one of the founder members of
WTO. Some areas like trade in services, promoting foreign of investment,
protecting patents, dispute settlement, trade in textiles and clothing, etc., were
given special emphasis in WTO. The developing countries will benefit from the
increased exports, foreign investment, technical assistance, etc., which will help
to promote their economic development.

WTO is an international trade organisation having set of rules and principles,

mutually designed and agreed upon to promote international trade in general and
reduction of tariff barriers and removal of import restrictions in particular.

The following are the features of WTO:

(i) It is an international organisation to promote multilateral trade.
(ii) It has replaced GATT.
(iii) It promotes free trade by removing tariff and non-tariff barriers in international
trade.
(iv) It has a fixed set of rules and regulations and it has a legal status. Its rules
and regulations are mutually designed and agreed upon by member nations.
(v) Agreements agreed by member countries are binding on all members of WTO
and if any member does not follow such agreements, then its complaint can be
lodged with the Dispute Settlement Body of WTO.
(vi) It includes trade in goods, trade in services, protection of intellectual property
rights, foreign investment, etc.
(vii) Unlike International Monetary Fund (IMF) and the World Bank, WTO is not
an agent of United Nations.
(

CLASS 11 BUSINESS
 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

viii) All the WTO members have equal voting rights (one country, one vote). (ix)
WTO has a large secretariat and huge organisational set-up.

Answer 26. The following are the functions of WTO:

(i) Laying down code of conduct aiming at reducing tariff and non-tariff barriers
in international trade
(ii) Implementing WTO agreements and administering the international trade
(iii) Cooperating with IMF and World Bank and its associates for establishing
coordination in global trade policy making
(iv) Settling trade-related disputes among member nations with the help of its
Dispute Settlement Body (DSB)
(v) Reviewing trade-related economic policies of member countries with the
help of its Trade Policy Review Body (TPRB)
(vi) Providing technical assistance and guidance related to management of
foreign trade and fiscal policy to its member nations
(vii) Acting as forum for trade liberalisation.

Answer 27. The name of the form filled up by Rahul is 'Bill of Sight'.

Meaning of 'Bill of sight': If due to some reasons, clearing agent does not have
full knowledge of the details of the imported goods, then in place of the bill of
entry, the bill of sight is filled. The available details are filled in and the
remaining columns are left blank. In such conditions, after inspecting the
imported goods, the custom duty is determined.

CLASS 11 BUSINESS
 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

Answer 28. (a) In the language of Foreign Business we call the order 'indent'.
Indents are of two types:

(i) Open Indent In this indent very little information is mentioned, like quantity of
product, types of products, etc. All the rest is left on the exporter to decide.

(ii) Closed Indent - In this, all the information regarding goods is mentioned.

(b) Mr. Naresh's order shall be called 'a closed Indent'; while, Mr. Ramesh's
order shall be called 'an open Indent'.

Answer 29:a) The benefits available to the Indian business firms engaged in
spice export are:

i. Prospects for Higher Profits: International business can be more profitable

than the domestic business. When the domestic prices are lower, business
firms can earn more profits by selling their products in countries where prices
are high.

ii. Improved Business Vision: The growth of international business of many

companies is essentially a part of their business policies. The vision to become
international comes from the urge to grow, the need to become more
competitive, the need to diversify and to gain strategic advantages of
internationalisation.

b) Some of the benefits of international business to the nations are:

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IMPORTANT QUESTIONS

i. Earning of Foreign Exchange: International business helps a country to earn

foreign exchange which it can later use for meeting its imports of capital
goods, technology, petroleum products, pharmaceutical products and a host of
other consumer products which otherwise might not be available domestically.

ii. Improving Growth Prospects and Employment Potentials: Producing solely

for the purposes of domestic consumption severely restricts a country's
prospects for growth and employment. Many countries, especially the
developing ones, could execute their plans to produce on a larger scale, and
thus create employment for people by getting involved in international
business.

Answer 30. Important Documents Used in Import Trade is following:

(i) Import Licence
(ii) Indent
(iii) Letter of Credit
(iv) Bill of Exchange
(v) Bill of Lading
(vi) Marine Insurance Policy
(vii) Invoice
(viii) Advice Letter to Import Trader
(ix) Bill of Entry
(x) Bill of Sight
(xi) Dock Challan
(xii) Delivery Order
(xiii) Dock Warrant
(xiv) Railway Receipt (R/R)

CLASS 11 BUSINESS
 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

Answer 31. Important Documents Used in Export Trade is following:

(i) Indent
(ii) Letter of Credit (L/C)
(iii) Export Licence
(iv) Railway Receipt (R/R)
(v) Shipping Order
(vi) Shipping Bill
(vii) Dock Challan
(viii) Mate's Receipt
(ix) Bill of Lading
(x) Marine Insurance Policy
(xi) Invoice
(xii) Invoice Certified by Consular
(xiii) Certificate of Origin
(xiv) Advice to Importer.

Answer 32. There are many ways in which the firm’s operate international
major forms of business operations which constitute international business
are given below:

Merchandise exports and imports: Merchandise means which are tangible.

That can be seen and touched. It is also known as trading goods. It
excludes trading services.

Exports and Imports of Services: Service exports and imports involve trade
in intangibles. It is because of the intangible aspect of services that trade in
services is termed as intangible trade.

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Licensing and Franchising: Permitting another party in a foreign country to

produce and sell goods under a firm’s trademarks, patents or copyright for which
a payment is made which is called royalty is another way of entering into
international business. For example, McDonalds’.

Foreign Investments: Foreign investment is another way to operate

internationally. It involves investment of funds abroad in exchange for financial
return. It may take two forms:

Direct Investment: It takes place when a company directly invests in property

like plant and machinery in foreign countries with a view to undertaking
production and marketing of goods and services in these companies.

Portfolio Investment: It is an investment that a company makes into another

company by way of acquiring shares or providing loans to the latter.

Answer 33: Foreign trade is not free from difficulties. The following are some of
the important difficulties of foreign trade:

·It is a long distance trade and as such it becomes difficult to maintain close
relationship between the buyer and the seller.

·Each country has its own language. As foreign trade involves trade between
two or more countries, there is diversity of languages. This difference in
language creates problem in foreign trade,

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 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

Foreign trade involves preparation of a number of documents which also

creates difficulties in the way of foreign trade.

·Some restrictions are imposed on export and import of commodities.

These restrictions stand on the progress of foreign trade.

·Foreign trade involves a lot of risks because trade takes place over a long
distance. Though the risks are covered through insurance, it involves the
extra cost of production because insurance cost is added to cost.

(a) The various formalities that need to be completed by Deignco before

reservation of shipping space are:

i. Pre-shipment Inspection: The compulsory inspection of certain products by a

competent agency as designated by the government. The government has
passed Export Quality Control and Inspection Act, 1963 for this purpose and
has authorized some agencies to act as inspection agencies. The exporter
needs to contact the Export Inspection Agency (EIA) or the other designated
agency for obtaining inspection certificate.

ii. Excise Clearance: As per the Central Excise Tariff Act, excise duty is
payable on the materials used in manufacturing goods. The exporter,
therefore, has to apply to the concerned Excise Commissioner in the region
with an invoice.

CLASS 11 BUSINESS
 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

Iii. Obtaining certificate of origin: Some importing countries provide tariff

concessions or other exemptions to the goods coming from a particular
country. For availing such benefits, the importer may ask the exporter to send a
certificate of origin. Their certificate can be obtained from the trade consulate
located in the exporter's country.

b) The exporting firm applies to the shipping company for provision of shipping
space. On acceptance of application for shipping, the shipping company issues
a shipping order. A shipping is an instruction to the capital of the ship that the
specified goods after their customs clearance at a designated port be received
on board.

Answer 35. The next which have to be followed by Nand Exports Clearing
Services Ltd. are:

i. Insurance of goods: The exporter gets the goods insured with an insurance
company to protect against the risk of loss or damage of the goods due to the
perils of the sea during the transit.
ii. Customs clearance: The goods must be cleared from the customs before
these can be loaded on the ship. For obtaining customs clearance, the exporter
prepares the shipping bill. Shipping bill is the main document on the basis of
which the customs office gives the permission for export. Shipping contains
particulars of the goods being exported, the name of the vessel, the port at
which goods are to be discharged, country of final destination, exporter's name
and address, etc.

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 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

Five copies of the shipping bill along with the following documents are then
submitted to the customs appraiser at the customs house:

Export contract or export order..

Letter of credit.
Commercial invoice.
Certificate of origin.
Certificate of inspection, where necessary.
Marine insurance policy.

After submission of these documents, the Superintendent of the concerned port

trust is approached for obtaining the carting order.

iii. Obtaining mate receipt: The goods are then loaded on board the ship for
which the mate or the capital of the ship issues mate's receipt to the port
superintendent. A mate receipt is a receipt issued by the commanding officer of
the ship when the cargo is loaded on board, and contains the information about
the name of the vessel, berth, date of shipment, description of packages, marks
and numbers, condition of the cargo at the time of receipt on board the ship, etc.

iv. Payment of freight and issuance of bill of landing: The C&F agent surrenders
the mates receipt to the shipping company for computation of freight. After
receipt of the freight, the shipping company issues a bill of lading which serves
as an evidence that the shipping company has accepted the goods sent and the
amount to be paid by the importer. The C&F agent gets it duty attested by the
customs.

CLASS 11 BUSINESS
 INTERNATIONAL BUSINESS
IMPORTANT QUESTIONS

v. Preparation of invoice: After sending the goods, an invoice of the dispatched

goods is prepared. The invoice states the quantity of goods sent and the
amount to be paid by the importer. The C&F agent gets it duly attested by the
customs.

vi. Securing payment: After the shipment of goods, the exporter informs the
importer about the shipment of goods. The exporter then needs to send a set of
documents to the banker, which is to be handed over to the importer on
acceptance of a bill of exchange. After receiving the bill of exchange, the
importer will instruct its bank to transfer money to the exporter's bank account.
Finally, the exporter would be required to collect a bank certificate of payment,
which will state that the necessary documents, along with the bill of exchange,
have been presented to the importer for payment, and that the payment has
been received in accordance with the exchange control regulations.

FORMS OF MARKET (ECONOMICS)

CLASS 11 BUSINESS
YE LE BAALAK ... MAUJ KAR

THE GAURAV JAIN 7690041256