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Changes in Trade Receivables

The ability o...

Question

The ability of a company to meet its short-term obligations known as .

A

Liquidity

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B

Solvency

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C

Profitability

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D

Trading on equity

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Solution

The correct option is D Liquidity
Liquidity refers to both an enterprise's ability to pay short-term obligations and a company's capability to sell assets quickly to raise cash.

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Changes in Trade Receivables

Standard XII Accountancy

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