CA CMA DISA(ICAI) B.COM
3956 Points
Joined November 2010
LC is like one type of guarantee provided by buyer's banker to seller if buyer fails to pay the amount then bank will pay on behalf of buyer and then bank will recover from buyer..
it is mainly used in international transactions.....
Relevance in context of Stock audit :-
For calculating Drawing power, goods purchased under LCs are not to consider otherwise it will result in the double finance on same stock