Question

A Treasury Bill is basically:a. An instrument to borrow short-term fundsb. An instrument to borrow long-term fundsc. An instrument of capital marketd. None of the above

Answer 1

Answer:

Realisation Account: This account is prepared at the time of dissolution of a firm to know the profit/loss at the time of dissolution of the firm. All the assets except cash/bank are transferred to the debit side of realisation account.

Answer 2

Answer: An instrument to borrow short-term funds

Explanation:

Treasury Bill is basically an instrument to borrow short-term funds.

When the Government requires money it can do so from the financial market by issuing two forms of debt instruments; that is through Treasury bills and Government bonds

The Government issues a Treasury bills( or T. BILL as it also known as) when it wants the money for a shorter period of time. The maximum maturity of such instruments is of 364 days . They are placed under the category of money market instrument.

Government bonds are issued when the requirement of such debt is for more than 5 years.

Hope this helps.