Answer (C) is correct . A sight draft, also known as a demand draft, is a draft ordering payment on sight, i.e., when presented for payment. It is sent to the importer’s bank with the shipping documents. After the draft is signed by the importer, the bank charges the importer’s account and remits the money to the exporter.
Answer (A) is incorrect because In a consignment, the seller-exporter delivers (consigns) goods to the importer-consignee for sale to third parties. The consignee pays the consignor only when goods are sold.
Answer (B) is incorrect because If the draft is a time draft (also called a trade acceptance), it will be payable at a specific future time. The time draft is returned to the exporter who may present the draft for payment when due or use it as collateral for a loan.
Answer (D) is incorrect because A trade acceptance is payable at a specific future time, not on sight (demand).
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