L/C 是 Letter of Credit, 是 用來同銀行借錢的文件. 證明甲如果收到乙的貨一定會俾錢.
1, A letter of credit is a document issued mostly by a financial institution which usually provides an irrevocable payment undertaking (it can also be revocable, confirmed, unconfirmed, transferable or others e.g. back to back: revolving but is most commonly irrevocable/confirmed) to a beneficiary against complying documents as stated in the credit.
2. The LC can also be the source of payment for a transaction, meaning that an exporter will get paid by redeeming the letter of credit. Letters of credit are used nowadays primarily in international trade transactions of significant value, for deals between a supplier in one country and a wholesale customer in another. They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, stormwater ponds, etc.) will be built. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Since nowadays almost all letters of credit are irrevocable, (i.e. cannot be amended or cancelled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any).
3. Although the irrevocable LC is a commitments, the amount of outstanding LC would not require to make any accounting entries. The reason is that the money will ONLY be paid to the beneficiary if the documents and the terms and conditions of the LC are met. Therefore, the applicants (importer) does not has any liability to be booked. However, if the importer's banker pays the exporter's banker, the amount of LC and interest for the amount drawn needed to be booked.
See the reference link below, there is an example to show the transaction.
參考資料:
http://en.wikipedia.org/wiki/Letter_of_credit 
