EX14-1 INCOTERMS I - Grade

(1.) Answer the following multiple choice questions for the section entitled "THE BASICS" by inserting the letter of the correct response in the light yellow cell to the ri
of the question.
(2.) Then read the instructions for the "INCOTERMS RESPONSIBILTY CHART" and complete the matrix and the multiple choice questions.

THE BASICS
Responsiblities:
[A] are the same for all stages of the INCOTERM.
[B] differ based on the stage of the INCOTERM.

INCOTERMS are recognized:

[A] only in the E.U.
[B] in the E.U. and North America.
[C] universally.

INCOTERMS are divided into four groups according to:

[A] seller responsibilities.
[B] buyer responsibilities.
[C] buyer and seller risks.
[D] the first letter of the term.

INCOTERMS RESPONSIBILITY CHART

(1.) For all of the following INCOTERMS, determine whether the Buyer or the Seller has responsibility for each component.
(2.) Or determine if the responsibility for the component falls outside the INCOTERM.
"B" in the light yellow cell indicates the Buyer bears responsibility.
"S" in the light yellow cell indicates the Seller bears responsibility.
"O" in the light yellow cell indicates responsibility falls outside the Incoterm.
ONLY USE the following links and class notes to determine the correct answers.
Preambles to Incoterms 2010

RESPONSIBILITY BY COMPONENT
Primary

Export

Notice

Packaging

Packaging

(notification of cargo

S
S
S
S
S
S

S
S
O
S
S
S

INCOTERM
ExW: Ex Works - specify location of factory, etc.
FAS: Free Alongside Ship - specify port
FOB: Domestic U.S. term
FOB: Free On Board - specify port
CFR: Cost And Freight - specify port of destination
CPT: Carriage Paid To - specify place of destination

availability or delivery)

S
S
S
S
S
S

For each of the following questions, insert the letter of the correct response in the light yellow cell to the right of the question.
INCOTERMS 2010:
[A] are internationally recognized commercial shipping terms
[B] are WTO mandated premiums and conditions on all export transactions
[C] do not apply to cross border shipments under the rules of NAFTA
[D] govern all international transactions.
INCOTERMS 2010 were written:
[A] under the direction of the World Trade Organization
[B] under trade promotion authority" granted by the U.S. Congress
[C] by a combination of ASEAN, NAFTA, and EU members
[D] by the International Chamber of Commerce
INCOTERMS 2010 apply to:
[A] international shipments over one ton
[B] shipments only if they are clearly included into the sales contract
[C] all non-contractual shipments between nations
[D] all modes of transportation.
INCOTERMS 2010 address:
[A] international contracts
[B] ownership of the merchandise
[C] international purchase rules
[D] none of the above
INCOTERMS 2010 can be used for:
[A] purchases involving ocean freight only.
[B] international purchases only.
[C] unregulated transactions.
[D] domestic and international purchases.
How many different terms are in INCOTERMS 2010?
[A]10 [B] 11 [C] 13 [D] 14
Which set of the INCOTERMS 2010 are not used for air shipments?
[A] EXW, CPT, & CIP
[B] EXW, FAS, & FOB
[C] DAF, DDP, & DDU
[D] CIF, FAS & FOB
According to Incoterms 2010 FOB is NOT allowed with shipments via:
[A] Air [B] Pipeline [C] Ship [D] Truck [E] A, B, and D
Which of the following sets of three INCOTERMS are not useable with all modes of transportation?
[A] EXW, CPT, & CIP
[B] CIP, CPT, & FCA
[C] DAF, DDP, & DDU
[D] CIF, FAS, & FOB
International contracts are valid only if they include the INCOTERMS 2000 term for the shipment of
merchandise.
[A] True [B] False
The seller is responsible for vessel loading under which term?
[A] FAS [B] CFR [C] CIF [D] FCA [E] B and C
Incoterms apply to the:
[A] Contract of sale
[B] Contract of carriage
[C] Contract of insurance
[D] Both A & B
Incoterms are listed on all the following documents except:
[A] Commercial invoice
[B] Proforma invoice

[C] Letter of credit

[D] Listed on all of the above
Copyright A. Whitebread 2003-2012

1 INCOTERMS I - Grade

d "THE BASICS" by inserting the letter of the correct response in the light yellow cell to the right

ART" and complete the matrix and the multiple choice questions.

S RESPONSIBILITY CHART

Buyer or the Seller has responsibility for each component.

utside the INCOTERM.

w cell indicates the Buyer bears responsibility.

w cell indicates the Seller bears responsibility.
l indicates responsibility falls outside the Incoterm.

ks and class notes to determine the correct answers.

Preambles to Incoterms 2010

RESPONSIBILITY BY COMPONENT
Loading At
Seller's
Facility
S*
S
S
S
S
S

ect response in the light yellow cell to the right of the question.
A