You are solvent if your
A)total liabilities exceed total assets.
B)total assets exceed total liabilities.
C)total assets exceed net worth.
D)total liabilities exceed net worth.
E)none of these.

Question

Quizplus · Accepted Answer

Solvency is the ability of a company to meet its long-term obligations with the help of its assets. If the total assets exceed total liabilities, then a company is considered solvent. Option A, C and D indicate that the company is not solvent, as liabilities exceed assets or net worth. Therefore, option B is the correct choice.

You Are Solvent If Your