Which of the following BEST defines solvency? A) being able to pay de

QUESTION

Which of the following BEST defines solvency?

A) being able to pay debts when they become due
B) managing money in the optimum way
C) earning more money than the previous year
D) assuring that gains outweigh losses
E) predicting revenues, costs, and expenses accurately

ANSWER

Answer: A
Explanation: A) To be solvent is to be in a position to pay debts when they become due, as opposed to being insolvent, which is often associated with bankruptcy.