Meter deposits restricted cash is classified in which fund type?

• A. General Fund
• B. Enterprise Fund
• C. Internal Service Fund
• D. Capital Projects Fund

Answer: (B)

Meter deposits from utility customers are tied to a service the government provides to the public and are funded through user charges. That makes the activity a business-type activity, which GASB accounts for in an Enterprise Fund. Enterprise funds are used for services charged to external users and operate similarly to private-sector utilities, so deposits collected from customers for these services belong in the same fund. The other fund types serve different purposes—General Fund for general governmental operations, Internal Service Fund for services provided within the government, and Capital Projects Fund for financing major capital projects—so they aren’t the appropriate place for this utility-related deposit.