Which of the following should be accounted for in an enterprise fund?

• A. Light poles financed by property owners $350,000
• B. Equipment used for supplying electric power to residents $1,250,000
• C. Van used to transport supplies to all city departments on a cost reimbursement basis $65,000
• D. City hall building

Answer: (B)

Enterprise funds are used for activities that are financed and operated like a business, with user charges to external customers as the primary funding source. The equipment used for supplying electric power to residents fits this because it directly provides a service to the public and is typically funded by fees charged to those external customers, reflecting a self-supporting utility. The other items don’t fit: light poles financed by property owners are funded by assessments rather than user charges for a utility; the van used to transport within the city serves internal departments (internal service fund); and the city hall building is a governmental asset supporting general government activities, not a revenue-generating utility.