Liquidity measures are intended to indicate an entity's ability to pay long-term debts as they come due.

Name: Liquidity measures are intended to indicate an entity's ability to pay long-term debts as they come due.
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Question

Quizplus · Accepted Answer

Liquidity measures are intended to indicate an entity's ability to pay short-term debts as they come due, not long-term debts. Long-term solvency measures are used to evaluate an entity's ability to pay long-term debts.

Liquidity Measures Are Intended to Indicate an Entity's Ability to Pay