Question

What provides the basis for the solvency of a business entity?

a.

Short-term sources of funds

b.

Long-term sources of funds and their uses

c.

Current liabilities

d.

Profitability ratios

Answer: (b).Long-term sources of funds and their uses Explanation:Long-term sources of funds and their uses provide the basis for the solvency of a business entity.

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Q. What provides the basis for the solvency of a business entity?

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