The solvency test:
A)is a requirement for companies to meet before and after distributing dividends
B)is a requirement for directors to verify that the company meets before and after distributing dividends
C)requires the company to be able to meet its short-term debts as they fall due
D)requires the company's assets to be greater than its liabilities
E)all of the above

Question

Quizplus · Accepted Answer

The solvency test is a financial assessment that companies must pass to ensure they can meet their long-term financial obligations, including before and after distributing dividends. It involves verifying that the company can pay its debts as they come due and that its assets exceed its liabilities, a process typically overseen by the company's directors.

The Solvency Test