Question

A __________ is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.

• A. money market
• B. treasury bill
• C. certificate of deposit
• D. commercial bill

Answer 1

The correct option is D commercial bill

A commercial bill is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms. Commercial bills are known as trade bills or accommodation bills. These are common instruments used in credit purchase and sale. These have short term maturity period generally 90 days and can be discounted with bank even before the maturity period.