In Which of the Following Circumstances Must an Enterprise Fund

question 18

Multiple Choice

In which of the following circumstances must an enterprise fund be used to account for the activity?

• A)A newly created electric utility fund will finance its operations by a charge to users based on kilowatt hours used.
• B)To finance the acquisition of plant facilities a newly created electric utility issues general obligation debt.
• C)To finance the acquisition of plant facilities a newly created electric utility issues revenue bonds which will be repaid from operations of the electric utility.
• D)To acquire needed plant facilities a newly created electric utility enters into long-term lease agreements.

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Definitions:

Pulp

Pulp refers to a raw material consisting of cellulose plant fibers that are used in creating paper or other products through various processing methods.

Paper Production

The process of manufacturing paper from raw materials like wood pulp, involving various stages such as pulping, pressing, and drying.

Inferior Good

A good whose demand decreases as the income of consumers increases, inversely related to income levels.

Income of Buyers

Refers to the purchasing power or total earnings of consumers within a market, impacting their ability to buy goods and services.