The most important reason for being concerned with a municipality's available fund balance as a percentage of its revenues and certain transfers in is that the ratio provides a good measure of:
A)the liquidity of its resources
B)the volatility of its revenue structure
C)its ability to weather future revenue shortfalls
D)its efficiency and effectiveness

Question

Quizplus · Accepted Answer

The available fund balance as a percentage of revenues and certain transfers in is a key indicator of a municipality's financial health, specifically its ability to manage through periods of reduced income without drastic measures. This ratio shows how much financial cushion the municipality has, which is crucial for weathering future revenue shortfalls.

The Most Important Reason for Being Concerned with a Municipality's