1. Under the Free Carrier Incoterms Rule, the exporter is responsible for clearing the merchandise for export. 
*a. True
b. False

2. An advantage of the Free Alongside Ship Incoterms Rule is the thorough documentation of the receipt of goods at a port holding area or to the quay alongside the ship. 
a. True
*b. False

3. Under the FOB Incoterms Rule, in countries where export authorities require a pre-shipment inspection, the importer must pay for it. 
a. True
*b. False

4. The CFR Incoterms Rule means Cost and Freight. 
*a. True
b. False

5. The Cost, Insurance, and Freight Incoterms Rule is specifically designed for ocean transportation. 
*a. True
b. False

6. Under the Cost, Insurance, and Freight Incoterms Rule, the importer takes responsibility for the goods when they arrive at the importers port. 
a. True
*b. False

7. Conceptually, the CPT Incoterms Rule is the same as the CFR Incoterms Rule, except it applies to goods shipped by means other than ocean transport, or shipped by sea without being handed over at the port of departure. 
*a. True
b. False

8. The Incoterms Rule CPT means Cargo Placed at Terminal. 
a. True
*b. False

9. An Incoterms Rule expressed as CIP, 126 Strada Molitor, Bucharest, Romania, Incoterms Rules 2010 means that under Incoterms Rules as of 2010, the goods are Carriage and Insurance Paid to that address in Bucharest, where the importer will take ownership of them. 
a. True
*b. False

10. A bill of lading or equivalent document (air waybill, sea waybill, multi-modal bill of lading) acts as proof of delivery under the CIP Incoterms Rule. 
*a. True
b. False

11. The EXW Incoterms Rule is mostly used for bulk shipments of commodities where the parties wish to have the exporter pay for the loading of the ship. 
a. True
*b. False

12. Under Incoterms Rule FAS, the importer is the party responsible for loading the goods onto the carrier. 
*a. True
b. False

13. Under Incoterms Rule FOB, transfer of responsibility for cargo from importer to exporter is at the ships rail as the cargo is loaded onto the ship
a. True
*b. False

14. The DAP Incoterms Rule means Deliver At Port. 
a. True
*b. False

15. Under the DAT Incoterms Rule, the exporter is responsible for the costs of transportation to the goods final destination and for the costs of clearing customs. 
a. True
*b. False

16. Under the FCA Incoterms Rule, it is the responsibility of the importer to arrange and pay for the loading of the goods. 
a. True
*b. False

17. Under the DDP Incoterms Rule, the importer takes control of the goods in the city where the exporter is located. 
a. True
*b. False

18. In planning their export strategy, companies generally determine which Incoterms Rule they will use on a case-by-case basis. 
a. True
*b. False

19. Under the CIF Incoterms Rule, the proof of delivery is an ocean bill of lading or a sea waybill. 
*a. True
b. False

20. It is always best to use only one term of trade in a quote to a potential customer so that there is no possible confusion. 
a. True
*b. False
 
21. The least customer-friendly of the Incoterms Rules in the EXW (Ex-Works) Incoterms Rule. 
*a. True
b. False

22. The more recently created Incoterms Rules (DAP, DAT) tend to define the responsibilities of the exporter and those of the importer much better than the older  (FAS, FOB, CIF) Incoterms Rules. 
*a. True
b. False

23. The DAP and DAT Incoterms Rules are new with the 2010 version of Incoterms Rules. 
*a. True
b. False

24. A shipment leaving Denver, Colorado, for Kobe, Japan, could be sold under an FOB Incoterms Rule. 
a. True
*b. False

25. Incoterms Rules are arbitrated by the International Trade Commission. 
a. True
*b. False


1. Incoterms Rules stands for
~ Incoterms Rules is the acronym for International Commerce Terms. 
@ Incoterms Rules is the acronym for International Commerce Terms. 
a. terminal incorporation procedures. 
b. in-country termination. 
c. international company terminology. 
d. intercontinental term standards. 
*e. international commerce terms. 

2. While on the surface Incoterms Rules determine who pays what when, ultimately the _____ directly or indirectly pay(s) the costs of transportation and international shipping. 
~ The importer ultimately pays since any costs the exporter pays will be built into the price charged. 
@ The importer ultimately pays since any costs the exporter pays will be built into the price charged. 
*a. importer
b. exporter
c. customs office
d. carrier
e. seller

3. The choice of the Incoterms Rule is almost always the decision of the
~ Agents and distributors are importers, so in this case, these terms are essentially synonymous and they do not select the choice of Incoterms Rule. 
@ Agents and distributors are importers, so in this case, these terms are essentially synonymous and they do not select the choice of Incoterms Rule. 
a. importer. 
b. agent. 
*c. exporter. 
d. distributor. 
e. carrier. 

4. The choice of a proper Incoterms Rule is a critical decision because
~ Choosing the proper Incoterms Rule is crucial because it can be an integral part of an export strategy, and it is linked to the level of customer service the firm is attempting to provide, while the competitive advantage is implied. 
@ Choosing the proper Incoterms Rule is crucial because it can be an integral part of an export strategy, and it is linked to the level of customer service the firm is attempting to provide, while the competitive advantage is implied. 
a. it can be an integral part of export strategy. 
b. it is linked to the level of customer service the firm is attempting to provide. 
c. it can be a competitive advantage. 
d. it commits the exporter to complete a series of tasks. 
*e. all of the answers in this set apply to this decision. 

5. In terms of cost and responsibility, whic is the easiest Incoterms Rule for the exporter and which is, in turn, the most difficult for the importer is
~ Delivered At Place (DAP) and Delivered Duty Paid (DDP) require the most responsibility for the exporter rather than the importer. Free On Board (FOB) basically splits the responsibility for the shipment between the exporter and the importer, and Cost and Freight places most of the responsibility on the exporter. Ex-Works (EXW) is correct as it is the easiest for the exporter. 
@ Delivered At Place (DAP) and Delivered Duty Paid (DDP) require the most responsibility for the exporter rather than the importer. Free On Board (FOB) basically splits the responsibility for the shipment between the exporter and the importer, and Cost and Freight places most of the responsibility on the exporter. Ex-Works (EXW) is correct as it is the easiest for the exporter. 
a. Delivered At Place (DAP). 
*b. Ex-Works (EXW). 
c. Delivered Duty Paid (DDP). 
d. Free On Board (FOB). 
e. Cost and Freight (CFR). 

6. The Incoterms Rule FCA means
~ FCA stands for Free Carrier. It can be used for exporter's premises or carrier's premises. 
@ FCA stands for Free Carrier. It can be used for exporter's premises or carrier's premises. 
*a. Free Carrier. 
b. From California. 
c. For Countries Abroad. 
d. Free Customs Administration. 
e. Free Carriage Agreement. 

7. FOB is 
~ FOB is Free On Board. 
@ FOB is Free On Board. 
*a. Free On Board. 
b. an Incoterms Rule that can be used only for merchandise that is containerized. 
c. an Incoterms Rule specifically designed for inland transportation. 
d. Freight On Board. 
e. an Incoterms Rule that was created most recently. 

8. Under the Incoterms Rule FOB, responsibility for the cargo
~ Unuder FOB, the responsibility shifts from the exporter to the importer when the goods are onboard the ship. 
@ Under FOB, the responsibility shifts from the exporter to the importer when the goods are onboard the ship. 
a. shifts from exporter to importer at the ships rail. 
b. shifts from exporter to importer when the goods are placed on the exporters loading dock. 
*c. shifts from exporter to importer when the goods are loaded onto the ship in the country from which the goods are leaving. 
d. shifts from exporter to importer when the importer pays the exporter. 
e. shifts from exporter to importer when the goods are lifted from the delivery truck in the port of departure. 

9. Incoterms Rules determine
~ Incoterms Rules define several aspects of an international sale, one being which tasks will be performed by the exporter. 
@ Incoterms Rules define several aspects of an international sale, one being which tasks will be performed by the exporter. 
a. how much the agents commission will be. 
*b. which tasks will be performed by the exporter. 
c. how much duty will be charged by the importing country. 
d. where the goods change ownership from exporter to importer. 
e. which country will collect the duty on the goods. 

10. The Incoterms Rule EXW specifies what regarding delivery?
~ Under EXW delivery takes place when the goods are made available to the importer by the exporter for pick up. 
@ Under EXW delivery takes place when the goods are made available to the importer by the exporter for pick up. 
a. the mode of transportation for delivery
b. who pays for delivery
c. who buys insurance for delivery
*d. it lets the exporter decide when the goods are delivered
e. the goods are delivered when the importer picks them up. 

11. The document that corresponds clearly to the transfer of responsibility for a Free Carrier shipment is the receipt given by the carrier to the exporter. This receipt can be
~ Each of these can function as a receipt indicating responsibility transfer. 
@ Each of these can function as a receipt indicating responsibility transfer. 
a. a sea waybill. 
b. an air waybill. 
c. a multi-modal bill of lading. 
d. a uniform bill of lading. 
*e. any type of waybill or bill of lading. 

12. The only Incoterms Rule which requires the importer to clear the merchandise for export from the country from which it is coming is
~ Free Alongside Ship, Cost and Freight, Delivered At Terminal, and Delivered At Place all require the exporter to clear the merchandise for export. 
@ Free Alongside Ship, Cost and Freight, Delivered At Terminal, and Delivered At Place all require the exporter to clear the merchandise for export. 
a. Free Alongside Ship. 
*b. Ex-Works. 
c. Cost and Freight. 
d. Delivered At Terminal. 
e. Free Carrier. 

13. Under the Free On Board Incoterms Rule, if a piece of cargo breaks loose while it is loaded onto the ship, but before it is loaded onto the ship, it becomes the responsibility of
~  If the cargo is damaged prior to being onboard the ship, it is the responsibility of the exporter. 
@  If the cargo is damaged prior to being onboard the ship, it is the responsibility of the exporter. 
*a. the exporter. 
b. the importer. 
c. the harbor master. 
d. the stevedore. 
e. the shipping line. 

14. Under the Cost, Insurance, and Freight Incoterms Rule, 
~ Under CIF, the exporter must pre-pay the insurance, which must total at least 110 percent of the value of the goods. The exporter pays all shipping costs, except for on carriage, which is to the importers account. 
@ Under CIF, the exporter must pre-pay the insurance, which must total at least 110 percent of the value of the goods. The exporter pays all shipping costs, except for on carriage, which is to the importers account. 
a. the importer must pre-pay the insurance. 
*b. the insurance must total at least 110 percent of the value of the goods. 
c. the importer pays all shipping costs, including on carriage. 
d. the exporter controls the goods until their arrival in the port of destination. 
e. the importer pre-pays for international carriage. 

15. One of the differences between the Delivered At Terminal Incoterms Rule and the Delivered At Place Incoterms Rule is that
~ Under DAT, the unloading costs are borne by the exporter. They are borne by the importer in a DAP transaction. 
@ Under DAT, the unloading costs are borne by the exporter. They are borne by the importer in a DAP transaction. 
a. the unloading costs are borne by the exporter under DAP and by the importer under DAT. 
*b. the unloading costs are borne by the exporter under DAT and by the importer under DAP. 
c. both importer and exporter share unloading costs in both DAP and DAT. 
d. unloading costs are borne by the cargo owner in both DAP and DAT. 
e. unloading costs are so small that it does not really matter. 

16. Delivered At Place is an Incoterms Rule designed specifically for 
~ Delivered At Place is for any merchandise, and any mode of transportation. 
@ Delivered At Place is for any merchandise, and any mode of transportation. 
a. ocean transportation. 
b. land transportation. 
c. air transportation. 
d. barge transportation. 
*e. it can be used for any means of transportation. 

17. Which Incoterms Rule shares a delivery point with the FOB Incoterms Rule? 
~ The FOB, CFR, and CIF Incoterms Rule share the same delivery point; when the goods are loaded onto the ship. 
@ The FOB, CFR, and CIF Incoterms Rule share the same delivery point; when the goods are loaded onto the ship. 
*a. Cost and Freight. 
b. Free Alongside Ship. 
c. Carriage Paid To. 
d. Carriage and Insurance Paid To. 
e. No Incoterms Rule shares a delivery point with the FOB Incoterms Rule

18. Under the Delivered Duty Paid Incoterms Rule, unloading costs are borne by the
~ Under DDP, all costs are borne by the exporter, except the last step, unloading the goods. 
@ Under DDP, all costs are borne by the exporter, except the last step, unloading the goods. 
a. railroad. 
b. ship line. 
c. exporter. 
d. harbor. 
*e. importer. 

19. Which Incoterms Rule(s) requiring the exporter to pay import duty?
~ Only DDP (Delivered Duty Paid) requires the exporter to pay duty. 
@ Only DDP (Delivered Duty Paid) requires the exporter to pay duty. 
a. FCA. 
b. CIP. 
*c. DDP. 
d. EXW. 
e. DAP. 

20. In a quote which includes multiple Incoterms Rules, so that the customer can choose, the Incoterms Rule that has the highest invoiced amount is
~ DDP (Delivered Duty Paid) requires the greatest effort on the part of the exporter and the greatest costs, which are then invoiced to the importer. 
@ DDP (Delivered Duty Paid) requires the greatest effort on the part of the exporter and the greatest costs, which are then invoiced to the importer. 
a. EXW. 
b. FCA. 
*c. DDP. 
d. CIP. 
e. DAT. 

21. Among the following, the most customer-friendly Incoterms Rule is
~ Under a DAP transaction, the exporter is providing more services to the importer than for FCA, CIP, FOB, or DES. (DES is an older, no longer used Incoterm). 
@ Under a DAP transaction, the exporter is providing more services to the importer than for FCA, CIP, FOB, or DES. (DES is an older, no longer used Incoterm). 
a. FCA. 
b. CIP. 
*c. DAP. 
d. DES. 
e. FOB. 

22. Certain countries do not allow importers to purchase insurance abroad. Which Incoterm is therefore not available to importers located in these countries?
~ Under CIP, the exporter provides insurance, which means that the importer purchases insurance abroad. 
@ Under CIP, the exporter provides insurance, which means that the importer purchases insurance abroad. 
a. FCA. 
*b. CIP. 
c. DAP. 
d. DES. 
e. FOB. 


Type: F
1. Under the FAS Incoterms Rule, in countries where export authorities require a pre-shipment inspection, the ____________________ has to pay for it. 
a. exporter
b. seller

Type: F
2. Under the CFR Incoterms Rule, until the merchandise is placed____________________ship, it is the responsibility of the exporter, after that, of the importer. 
a. onboard
b. on board

Type: F
3. Under the CFR Incoterms Rule, if the pre-paid contract of carriage does not include the unloading of the ship, then the ____________________ must pay for it. 
a. importer
b. buyer

Type: F
4. Under the CPT Incoterms Rule, the bill of ____________________ can act as a proof of delivery from the carrier. 
a. lading

Type: F
5. Under the DAP Incoterms Rule, the ____________________ is responsible for unloading the goods from the carriers truck, clearing customs, and paying for any inland transportation beyond the city of destination. 
a. importer
b. buyer

Type: F
6. Under the DAT Incoterms Rule, the exporter is responsible for the goods until they arrive in the agreed-upon terminal in the ____________________ of departure or of destination. 
a. port

Type: F
7. As far as the importer is concerned, under the DDP Incoterms Rule, receiving an international shipment is no different that receiving a(n) _____________________ shipment. 
a. domestic
b. national

Type: F
8. Variants to the CFR Incoterms Rule were created to reflect which of the trade partners was responsible for unloading costs. When the exporter bears the costs, the term CFR ____________________ is used. 
a. landed

Type: F
9. The Incoterms Rule CPT means ____________________ Paid To. 
a. carriage

Type: F 
10. The Incoterms Rule FAS means Free _____________________ Ship. 
a. alongside

Type: F
11. The customer-focused exporter gives the importer a quote in which the importer can determine which ____________________ should govern the transaction. 
a. Incoterms Rule
b. Incoterms rule
c. Incoterm
d. Incoterms

Type: F
12. The choice of an Incoterms Rule, as well as the choice of the method of payment and of other related transaction alternatives, constitute an exporters ____________________ service strategy. 
a. customer