Which of the following ratios would be most helpful in assessing the liquidity of a governmental entity?
A)Net tax-supported long-term debt/population.
B)Own source revenues/total revenues.
C)Debt service expenditures/total expenditures.
D)Unreserved fund balance/operating revenues.

Question

Quizplus · Accepted Answer

The ratio of unreserved fund balance/operating revenues would be most helpful in assessing the liquidity of a governmental entity as it represents the amount of resources that are available for current expenditures. It shows the extent to which an entity is relying on reserves to balance its budget, and how much cushion it has to cover unexpected expenses or revenue shortfalls. A higher ratio indicates greater liquidity and financial flexibility.

Which of the Following Ratios Would Be Most Helpful in Assessing