LETTER OF CREDIT Definition

Bookmark and Share

LETTER OF CREDIT (LOC) is a legal document issued by a buyer's bank that upon presentation of required documents payment would be made. Usually confirmed by the sellers bank, protection is given to the seller that payment will be made if the goods are shipped correctly, and protection is given to the buyer that the goods will be shipped before payment is made.

Learn new Accounting Terms

WHEN-ISSUED, in securities, is a transaction made conditionally because a security, although authorized, has not yet been issued, e.g, new issues of stocks or bonds, stocks that have been split and Treasury securities are all traded on a when-issued basis.

UNDER-APPLIED FACTORY OVERHEAD is the amount of residual factory overhead that remains once all known overhead allocations are assigned to the applicable products. See also UNABSORBED COSTS.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.