Solvency refers to the ability of an entity to:
A) improve sales.
B) earn a high rate of profit.
C) meet its long-term obligations.
D) A and B

Question

Quizplus · Accepted Answer

Solvency refers to the ability of an entity to meet its long-term obligations. It is not related to sales or profit. Therefore, option C is the correct choice. Option D is incorrect as both improving sales and earning a high rate of profit are not the primary factors that determine solvency.

Solvency Refers to the Ability of an Entity To