2017 REVIEW ON

TARIFF LAWS
(DAY 02)

ANSWERS TO
EXAM ON
INCOTERMS 2010
1
1. As an exporter you were asked by importer
“A” to quote for an export order to be
shipped by air. “A” said he will pick up the
order from your warehouse and he will be
responsible for export customs clearance.
What is the term of purchase?
a. FCA
b. EXW
c. FOB
d. None of the choices

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2. It is a term of purchase where the seller
pays for the freight and insurance and the
responsibility of the seller is to deliver the
goods to the plane’s terminal at the
country of exportation.
a. CIF
b. FCA
c. CIP
d. CPT

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3. An exporter entered into a sales contract
with an importer where the importer will
not pay for the freight and the transfer of
risk will be after discharge of the goods
from the vessel at the port of destination.
What is the term of purchase?
a. DAP
b. DAT
c. CPT
d. CFR

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4. It is a term of purchase where delivery is
made by the seller by bringing the goods to
the terminal at the country of exportation.
a. DAT
b. FOB
c. EXW
d. FAS

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5. You are a company operating in Bangkok, Thailand and
a seller in Escolta, Manila was asked to quote for a
shipment of 5,000 MT soda ash in bulk and said that
he will be responsible to charter a vessel and
correspondingly pay for the freight.

Part of the responsibility of the seller is to unload the

shipment in Bangkok, Thailand. Assuming the value of
the order soda ash is US$25,000.00 how shall the
invoice look like?
a. US$25,000.00 FOB INCOTERMS 2010 MANILA,
PHILIPPINES
b. US$25,000.00 DAT INCOTERMS 2010 MANILA,
PHILIPPINES
c. US$25,000.00 FOB INCOTERMS 2010 BANGKOK,
THAILAND
d. US$25,000.00 DAT INCOTERMS 2010 BANGKOK,
THAILAND 6
6. What is the proper way of invoicing an
import order where the exporter shall be
responsible for the payment of freight and
marine insurance and the manner of
shipment is by sea only?
a. CIF INCOTERMS 2010
b. CIP INCOTERMS 2010
c. DDP INCOTERMS 2010
d. DAT INCOTERMS 2010

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7. Seller in Tacurong City delivered the goods
to carrier’s warehouse in GenSan. Bill of
lading shows freight charges as “FRT
COLLECT” and will be paid by importer
upon arrival of goods in Nagoya.
a. FCA Nagoya
b. FCA GenSan
c. EXW Tacurong
d. CFR Nagoya

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8. You are an exporter with regular customer “A”
an importer from the United States. In your
last transaction with “A” the last purchase
terms was FCA INCOTERMS 2010.
Today he asked you to quote on EXW basis
with your factory as the place of delivery. In
the FCA transaction your factory was also the
delivery place.
What are you going to do to your old FCA price
to arrive at an EXW quote?
a. Deduct stuffing
b. Deduct customs clearance
c. A and B
d. None of the choices 9
9. Invoice shows cost of the goods, ocean
freight and loading charges to vessel.
Covering B/L indicated freight charges as
“FRT PREAID”. Importer paid local
insurance premium against loss or damage
of the goods during transit from Manila to
Japan. What is the proper term?
a. CFR Manila
b. CPT Manila
c. CPT Japan
d. CFR Japan

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10. Exporter delivered the goods to Philippine
Airlines warehouse at NAIA terminal and
paid air transport and insurance premium
from Manila to Australia. Air waybill
indicated freight charges as “Pre-Paid”.
a. CPT Australia
b. CIP Australia
c. CPT NAIA
d. CIP NAIA

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11. As Import and Export Manager of Company
“A” you were asked by the President of your
company to purchase from Delaware, Inc.
from USA 500 assorted household goods with
the condition that the supplier will be
responsible for customs clearance and delivery
to warehouse in Sanciangco Street, Cebu City.
Further the customs duty and VAT should be
incorporated in the selling price. What is the
purchase term your boss is thinking of?
a. DAT Cebu
b. DDP Cebu
c. DAP Cebu
d. DDP USA 12
12. As exporter of rattan made furniture in
Cebu you want to quote to buyer “A” of
Singapore on the basis that you will only
be responsible to deliver to the CY of the
shipping line but without you paying for
the freight. Your buyer however wants you
to be responsible to process the Export
Declaration (ED). What is the applicable
purchase term?
a. FCA Cebu
b. FAS Cebu
c. EXW CY
d. FCA Singapore 13
13. As an exporter based in Davao, your buyer
from Indonesia of wooden tiles wants you
to deliver the commodity from Java
International Airport to his warehouse in
Surabaya with an arrangement that you
will handle customs clearance in the
country of exportation. What is the
purchase term applicable?
a. FCA Davao
b. CIP Surabaya
c. DDP Surabaya
d. DAP Surabaya
14
14. Which of the following is not to be
included in the computation of dutiable
value?
a. Delivery at the country of importation
on DAP purchase term
b. Export clearance expenses in an FOB
transaction
c. Loading at the collecting vehicle in the
country of origin.
d. All of above are dutiable.

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15. You are a new exporter in Tacurong City
and you are not yet well versed in export
costing. So you want to give a quotation to
your buyers where you will only quote for
the cost of production and packing plus
certain amount of mark-up for profit.
Which of the following should you use to
make quotation?
a. FOB Tacurong
b. FCA Tacurong
c. EXW Tacurong
d. None of the choices
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16. You are an exporter and your buyer does
not want to be bothered by any activity
related to importations. He just want to
pay you and expects the goods to be
delivered to his warehouse. What is the
purchase term you should use? Your
importer is from Nagoya, Japan. Your
warehouse is in Lipa, Batangas.
a. EXW Lipa, Batangas
b. EXW Nagoya, Japan
c. DDP Lipa, Batangas
d. DDP Nagoya, Japan
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17. You were asked by buyer “A” to quote for
an export order to be shipped by air. “A”
said he will pick up the order from your
warehouse and will be responsible for
export customs clearance. What is the
term of purchase?
a. FCA
b. EXW
c. FOB
d. None of the choices

18
18. What is the purchase term where it is
noted in the bill of lading “freight prepaid”
for an importation of 3 X 40’ FCL but the
importer from Singapore asked the shipper
to secure for marine insurance, the
delivery is made in the warehouse of the
carrier in Novaliches?
a. CPT Singapore
b. CIP Novaliches
c. CIP Singapore
d. CIF Singapore
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19. What is the purchase term where it is
noted in the HAWB “freight collect” and
where the supplier in Cairo, Egypt
delivered the ordered goods by an
importer in Davao to the warehouse in
Cairo of the freight forwarder nominated
by the importer and prepared the required
export clearances?
a. EXW Cairo
b. FOB Cairo
c. FAS Cairo
d. None of the choices
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20. Which of the following is true in a DDP
transaction?
a. The seller has the responsibility to the
buyer to cover the marine insurance of the
ordered goods.
b. The buyer has the responsibility to the
seller to cover the marine insurance of the
ordered goods.
c. The seller will unload from the vehicle
delivering the ordered goods at the agreed
place of delivery.
d. The buyer will unload from the vehicle
delivering the ordered goods at the agreed
place of delivery. 21
21. Of the following charges which is not
considered as dutiable under the
Philippine customs valuation system?
a. Exporting charges at the country of
exportation in an EXW transaction.
b. Loading charges in an FAS transaction.
c. Unloading charges in the country of
importation.
d. Customs brokerage charges at the
country of loading.

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22. What will add to an FCA quotation to
arrive at an FOB quote?
a. Cost of export clearance
b. Terminal handling charges
c. Inland freight from exporter’s place to
port
d. Loading cost to collecting vehicle

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23. What will you add to an FOB quote when
the importer wants the supplier to make
the goods available at the terminal at the
country of importation?
a. Freight
b. Discharging cost at the country of
importation
c. Both a and b
d. None of the choices

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24. On which following terms that cost of
export clearance is not included?
a. FCA
b. EXW
c. FAS
d. FOB

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25. What is the proper term where the seller
delivers the ordered goods to a carrier and
pays for the air freight?
a. FCA
b. CPT
c. CFR
d. b and c are correct

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26. SMC Consolidated Power Corporation
decided to purchase 1,111 pcs of piles from
Davao. The procurement team wants to
have it shipped in 10x20’ FCL up to Xiamen
Port. The buyer sourced out Pioneer
Insurance to cover the marine insurance
from Davao to Xiamen. SMC, the shipper
procures the freight up to Xiamen Port.
What is the applicable INCOTERM for this
arrangement?
a. CIP
b. CPT
c. CFR
d. CIF 27
27. Therma South Inc, one of the leading coal
fired power plant developer in the
Philippines, contracted Formosa to build
the power plant. The contract states that
Formosa is responsible to deliver the
goods at Therma South’s project site
excluding customs formalities and
payment of duties and taxes, what is the
applicable INCOTERM?
a. DDP
b. FCA
c. DAT
d. DAP 28
28. Oceanagold Philippines placed an order to
OEM Industrial Corporation to supply 3,000 pcs
of air filters from Japan. Antrak Phils, was
being contracted by Oceanagold to arrange
freight booking from Narita airport to NAIA
Phils. OEM, on the other hand, delivers the
goods at the airline’s depot nominated by
Ocenagold/Antrak Phils. The buyer secured
port to port insurance to cover the shipment,
with this arrangement what is the applicable
INCOTERM?
a. FCA
b. CFR
c. DAT
d. EXW 29
29. 2,000 MT of Hydrated Lime is scheduled for
shipping from Indonesia to the Port of Manila
by end of 2017 by one of the leading mining
companies in the Phils, PhilGold. The initial
freight booking was made by the shipper with
NYK using a conventional vessel. The exporter
has paid for the carriage up to Masbate Phils,
and sourced out marine insurance at the load
port. What could be the INCOTERM reflected
on the sales contract?
a. CPT
b. CIF
c. DAT
d. DDP 30
30. Terumo Phils. scheduled to export 5 pallets of syringe to their
client in the USA, Terumo USA. Antrak Phils was being
nominated by a freight forwarding agent in USA, outsourced by
Terumo USA, to handle the pickup of cargoes from shipper’s
facility in Laguna. Antrak Phils immediately arrange a freight
booking with carrier and coordinated with the trucker for pickup
of the export goods. During the pickup of cargoes, it was Terumo
Phils. who did the loading of cargoes on the truck of Antrak
Phils, would this qualify for EXW? Which of the choices is likely
to be acceptable?
a. Yes, EXW includes loading charges at the seller’s premises.
b. No, EXW should strictly be interpreted as cost of goods only.
c. No. EXW pertains only to cost of goods at factory-basis. All
other costs pertain to the buyer, Terumo USA. Since it was
Terumo Phils (the seller) who did the loading, the correct
term should be FCA.
d. No, should the the party disagrees, but if they compromise
then it will still qualify under EXW. 31
31. Among the practical uses of incoterms
2010 for exporter is to:
a. Minimizing cost while minimizing risk
b. Minimizing risk and maximizing profit
c. Minimizing risk while maximizing cost
d. Minimizing risk and minimizing profit

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32. Among the practical uses of incoterms
2010 for importer is to:
a. Minimizing cost while minimizing risk
b. Minimizing risk and maximizing profit
c. Minimizing risk while maximizing cost
d. Minimizing risk and minimizing profit

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33. Which does not belong to the group?
a. Ocean Freight
b. Marine insurance
c. Duties and taxes
d. Adjustment

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34. Importer from Italy wants his shipment to
be ready for pick-up at the carrier’s
warehouse in Pasay, he said that he will be
the one to prepare for all the formalities as
he already arranged with his nominated
carrier for all documentary requirements
and formalities, part of the purchase price
is the loading and transportation cost up to
the carrier’s warehouse in Pasay. What is
the correct incoterm to be utilized?
a. FCA
b. CPT
c. CIP
d. EXW 35
35. Which does not belong to the group?
a. Destination Charges
b. Post Importation Cost
c. Pre-carriage Cost
d. Permissible Deductions

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