Certified Government Financial Manager (CGFM) 2026 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 875

Which of the following is an example of short-term financing instruments?

Term Bonds.

Tax Anticipation Notes.

Tax Anticipation Notes are indeed an example of short-term financing instruments. These notes are issued by governmental entities to raise funds when there is a temporary cash flow shortfall, typically in anticipation of future tax revenues. They are designed to provide immediate cash flow for operational needs, making them a classic example of short-term financing, as they usually have maturities ranging from a few months to a year.

While the other options involve financing, they are not classified as short-term instruments. Term bonds usually have longer maturities, often extending to several years or decades. Certificates of Participation are also longer-term financing mechanisms that represent an interest in a lease agreement. Capital leases are commitments that span multiple periods, often classified as long-term liabilities on financial statements, thereby disqualifying them as short-term financing options.

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Certificates of Participation.

Capital Leases.

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