A commercial bill is used to ____________

Meet the short term debt

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Pay the interest

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Finance the working capital requirements

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Meet the long term debt

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Solution

The correct option is C
Finance the working capital requirements

Working capital financing is done by various modes such as trade credit, cash and discount of bills, bank guarantee, letter of credit, factoring, commercial paper, working capital financing extensively used by all small and big businesses.

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Similar questions

A fixed asset should be financed through

(a) a long term liability

(b) a short term liability

A Treasury Bill is basically

(a) An instrument to borrow short-term funds

(b) An instrument to borrow long-term funds

(d) None of the above

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