Which of the following statements is true regarding the formula most often used by governments for the liquidity ratio?

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The formula most often used by governments for the liquidity ratio includes both cash and receivables, as well as short-term investments, divided by current liabilities. This formula gives a more comprehensive view of the organization's ability to meet its short-term obligations. Choices A and B are not as comprehensive, as they only focus on one aspect of current assets. Choice C uses payables instead of current liabilities, which would not accurately reflect the organization's liquidity position.

Which of the Following Statements Is True Regarding the Formula