Which of the following is least risky from the buyer’s viewpoint?

Which of the following is least risky from the buyer’s viewpoint?
A . Payment on delivery
B . Payment of 50% at time of order; with balance to be paid 90 days after delivery
C . Payment in full at time of order
D . Payment 60 days after delivery

View Answer

Answer: D

Explanation:

Payment (the implication here is ‘in full’) 60 days after delivery allows the buying organisation time to check the goods carefully, and possibly even use them in that time.

All of the other options would require the buyer to part with money prior to holding the goods, thus exposing that sum to risk. The least risky from the buyer’s viewpoint is therefore after 60 days. Particularly hazardous would be payment at time of order.