Do you agree or disagree with this rationale related to how items within accounts receivable could affect liquidity and solvency?

"Solvency refers to an enterprise's capacity to meet its long-term financial commitments. Liquidity refers to an enterprise's ability to pay short-term obligations- the term also refers to a company's capability to sell assets quickly to raise cash" (Bio, 2022).

Liquidy ratios look at either all current assets or specifically accounts receivable so these ratios are extremely impacted by any change in accounts receivable. Solvency ratios look at the long-term financial well-being so they look more at total debt & equity, total assets, and overall operating income. Accounts receivable would again fall into these categories so any changes there would also change the ratios.

Total accounts receivable is the overall sum of all receivables defined by criteria like a period of time. Net receivables is (total accounts receivable - allowances for doubtful accounts). This difference may affect financial statements because there is a difference in what number would be on the financial statement.