The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is referred to as:
A) solvency and profitability.
B) solvency and liquidity.
C) solvency and equity.
D) solvency and leverage.

Question

Quizplus · Accepted Answer

Solvency refers to a business's ability to pay its debts as they come due, while profitability refers to its ability to earn a reasonable amount of income.

The Ability of a Business to Pay Its Debts as They