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NEW QUESTION: 1
Which one of the following statements is correct in relation to presenting the financial position of an entity?
A. Solvency is the availability of total assets over a long-term, while liquidity is the availability of total assets over the short-term to meet financial commitments as they fall due.
.
B. Liquidity is the ability to repay long-term financial commitments, whereas solvency is the ability to repay short-term commitments.
C. Solvency is the availability of cash over the long-term, while liquidity is the availability of funds over the short-term to meet financial commitments as they fall due.
D. Liquidity represents cash holdings, while solvency is long-term profitability.
Answer: C