Which service is commonly financed through an enterprise fund accounting?

• A. Street maintenance
• B. Water utility
• C. Public library administration
• D. General government operations

Answer: (B)

Enterprise funds are used for services that operate like a business and are financed mostly by the charges paid by users. A water utility fits this model because customers pay for the water service, and those revenues are expected to cover the service’s operating costs, depreciation, and capital investments, making the accounting resemble a private-sector operation. In contrast, street maintenance, libraries, and general government operations are typically funded from the general fund or specific tax- and grant-based sources, not primarily from user charges, so they aren’t usually accounted for in an enterprise fund.