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Please help me understand this realed to Foreign Account Receivable.
What is Forfaiting & Letter of Credit?
Forfaiting is effectively the same as factoring when exporting. The seller gets an advance from the forfaiter who is then responsible for collecting the money.
A letter of credit is where the customer’s bank guarantees to the seller’s bank that the money will be paid.
I will be surprised if either of these get mentioned in the exam and if they are then it would never be more than past of one 2 mark question.