Accounting Fundamentals Certification (AFC) Practice Test 2025 – The Comprehensive All-in-One Guide to Exam Success!

To become solvent, a client must focus on improving her financial situation by increasing her assets or reducing her liabilities. In this context, selling something with value that she no longer needs can help generate cash. Selling her bike, for instance, could provide immediate funds that could be applied toward outstanding debts or necessary expenses.

When evaluating the other options, they may not be as directly beneficial for achieving solvency. Selling her car could hinder her mobility and ability to pursue employment or education, potentially leading to greater financial issues in the long run. Using her IRA to pay off student loans may lead to tax penalties and loss of retirement savings, which can further jeopardize her financial future. Using savings to pay down credit card debt can be a prudent choice, but it also depletes her emergency fund, which is vital for financial stability.

Thus, selling her bike can be a straightforward and immediate way to create liquidity without significantly impacting her daily life or future financial well-being.