Practice Test Geeks(CES) Certified Export Specialist Practice Test
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CES Export Pricing & Incoterms Flashcards

6 cards from real CES practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. What does CIF stand for in Incoterms 2020, and which mode of transport does it apply to?

    Answer: Cost, Insurance and Freight — sea and inland waterway only

    CIF (Cost, Insurance and Freight) requires the seller to pay freight and minimum insurance to the named port of destination; it applies only to sea and inland waterway transport.

  2. A US exporter quotes a price of $5,000 FCA Chicago. What does this mean?

    Answer: The seller's price covers delivery to the named carrier at Chicago, with risk transferring to the buyer at that point

    FCA Chicago means the seller delivers the goods to the buyer's nominated carrier in Chicago, and risk passes to the buyer from that handover point.

  3. What is 'marginal cost pricing' and why might a US exporter use it?

    Answer: Setting export price to cover only variable costs, allowing domestic sales to absorb fixed costs

    Marginal cost pricing sets the export price above variable costs only, since fixed costs are already covered by domestic sales, enabling competitive foreign pricing.

  4. Which Incoterms 2020 group (D-terms) requires the seller to bear the risk of transport all the way to the destination?

    Answer: D-terms (DAP, DPU, DDP)

    D-terms (DAP, DPU, DDP) require the seller to deliver goods to the named destination, bearing all risks during the main carriage to that point.

  5. What is the 'arm's-length principle' as applied to US export transfer pricing?

    Answer: The IRS standard that transactions between related parties must be priced as if they were between unrelated parties

    The arm's-length principle, enforced by the IRS under Section 482, requires that intercompany prices reflect market-rate prices that unrelated parties would negotiate.

  6. Under Incoterms 2020, which rule replaced DAT (Delivered at Terminal) from the 2010 version?

    Answer: DPU

    Incoterms 2020 replaced DAT with DPU (Delivered at Place Unloaded), clarifying that the seller must unload goods at any agreed destination, not just a terminal.