Final answer:
The pro forma invoice is the document that specifies payment details by the exporter-seller in trade financing. It is not an actual invoice but serves as an official quote for the buyer to arrange payment or financing. Other documents such as the letter of credit are used to guarantee and process payments.
Step-by-step explanation:
In the context of trade financing, the document that specifies how much and by what means the exporter-seller wants to be paid is the pro forma invoice (Option B). A pro forma invoice is a preliminary bill of sale sent to buyers in advance of a shipment or delivery of goods. It typically includes the type, quantity, and price of the goods or services the seller intends to deliver. While the pro forma invoice is not a true invoice, it serves as an official quote that provides buyers with the necessary details to make a payment, secure financing, or open a letter of credit (L/C).
Other documents listed, such as a document against payment (D/P), a time draft, a bill of exchange, and a letter of credit, are used in different stages of a trade transaction. For example, a letter of credit is issued by a bank to guarantee that a buyer's payment will be received on time and for the correct amount. The bill of exchange and time draft are used to facilitate this process.
The balance of trade is closely connected to the international flows of financial capital, also referred to as the balance of payments. This relationship underpins the structure and terms within the documents used in international trade.