Bookkeeping coverage through payment of import letters of credit

Documentary letter of credit is one of the most common non-cash payment instruments in international financial transactions. As the means to provide secure payment of the suppliers and the means to customers provide interest, an international documentary credit is subject to payment of contract between the exporter and importer. The purpose of using this instrument in the international payment with regard to imports of goods, is that guarantees of goods delivery are provided to importer. The aim of signing the letter of credit is that a risk to importer, importing goods from exporter in another country, reduce to a minimum and almost completely eliminated. The example of bookkeeping coverage through payment of imports letters of credit will be shown in this article.