The term financial position is closely related to the term liquidity while financial condition is much broader in scope,including not only financial position but also consideration of long-term solvency.

Question

Quizplus · Accepted Answer

Financial position as defined by GASB focuses on assets and liabilities that require cash or are normally converted to cash in the near future; thus, it is closely related to the concept of liquidity. As defined on page 417, financial condition is a much broader concept.

The Term Financial Position Is Closely Related to the Term