Answer (B) is correct . A sale on open-account is risky because the exporter merely ships the goods to the importer, who signs an invoice acknowledging receipt. Thus, the exporter is not assured of payment if the importer defaults. Such an arrangement is most likely if the parties have previously transacted business.
Answer (A) is incorrect because A letter of credit issued by a bank assures payment to a seller.
Answer (C) is incorrect because A draft may be negotiated for value to a third party or presented for payment.
Answer (D) is incorrect because A draft may be negotiated for value to a third party or presented for payment.
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