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 leverage
B) solvency and profitability
C) solvency and liquidity
D) solvency and equity

Question

Quizplus · Accepted Answer

The ability to pay debts (solvency) and earn income (profitability) are both essential for a business's long-term success. Option B addresses both of these factors, while the other answer choices only address one aspect (such as liquidity or equity).

The Ability of a Business to Pay Its Debts as They