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

PAYMENT TERMS is the legal or contractual stipulation by a business as to when payment is to be made for goods or services supplied, e.g. cash with order, payment on delivery, or within a particular number of days of the invoice date.

LIBID is the London Interbank Bid Rate, the rate that a bank is willing to pay for funds in the international interbank market.

Suggest a Term

Enter Search Term

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