Multiple Choice
Which of the following business segments would NOT be considered a cost center?
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1. Introduction to Accounting
Types of Accounting
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Which of the following is NOT a capital market instrument?
A
Debentures
B
Preference Shares
C
Treasury Bills
D
Equity Shares
Verified step by step guidance1
Understand the concept of capital market instruments: Capital market instruments are financial tools used for long-term financing, typically with maturities longer than one year. Examples include equity shares, debentures, and preference shares.
Review the characteristics of each option: Debentures are long-term debt instruments, preference shares are equity instruments with preferential rights, and equity shares represent ownership in a company. These are all capital market instruments.
Analyze Treasury Bills: Treasury Bills are short-term debt instruments issued by the government, typically with maturities of less than one year. They are considered money market instruments, not capital market instruments.
Compare Treasury Bills with the other options: Since Treasury Bills are short-term and belong to the money market, they differ from the other options, which are long-term and belong to the capital market.
Conclude that Treasury Bills are NOT a capital market instrument based on their short-term nature and classification within the money market.
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