The quality of earnings computation is a test of the solvency of the company.

Name: The quality of earnings computation is a test of the solvency of the company.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The quality of earnings computation is not a test of solvency, but rather a measure of the sustainability and reliability of a company's earnings. Solvency is determined by the company's ability to meet long-term obligations and debt repayments.

The Quality of Earnings Computation Is a Test of the Solvency