Enterprise Fund accounting and reporting is required when an activity is financed with debt secured solely by a pledge of the net revenue from fees and charges.This type of debt typically takes the form of what?
A)revenue bonds
B)general obligation revenue bonds
C)revenue anticipation notes
D)private placements

Question

Quizplus · Accepted Answer

Revenue bonds are specifically issued to finance enterprise activities, which are funded solely by user fees or charges. They are supported solely by pledged revenues, and the issuer does not pledge the full faith and credit of the issuer. Therefore, enterprise funds are required to use revenue bonds to finance their activities. Choice B is incorrect because general obligation bonds are not solely based on the net revenue from fees and charges. Choice C is incorrect because revenue anticipation notes are short-term, cash flow borrowing, and they are not issued to finance enterprise activities. Choice D is incorrect because private placements are not a form of debt issued in the public market.

Enterprise Fund Accounting and Reporting Is Required When an Activity