Customers' meter deposits, which cannot be spent for normal operating purposes, would be classified as restricted cash in the balance sheet of which fund type?
A) Internal service fund.
B) Private-purpose trust fund.
C) Enterprise fund.
D) Special revenue fund.

Question

Quizplus · Accepted Answer

Enterprise funds account for operations that are financed and operated in a manner similar to private business enterprises, where the intent is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Meter deposits, which are customer deposits, are typically associated with enterprise funds and are classified as restricted cash because they cannot be used for normal operating purposes.

Customers' Meter Deposits, Which Cannot Be Spent for Normal Operating