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The function of measuring a firm's solvency and liquidity can be carried out using:

AP and L account

BBalance sheet

CStatement of changes in working capital

DStandard costing

Answer:

B. Balance sheet

Read Explanation:

The balance sheet shows the company’s assets and liabilities. Solvency (long-term ability to meet obligations) and liquidity (short-term ability to pay) are assessed from this statement.


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