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"Enterprise funds should not be permitted to accumulate unrestricted net position, since to do so would...

"Enterprise funds should not be permitted to accumulate unrestricted net position, since to do so would indicate overpricing of its services." Do you agree? Why or why not?

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Answer #1
  • No, I do not agree with the statement, "Enterprise funds should not be permitted to accumulate unrestricted net position, since to do so would indicate overpricing of its services."
  • It is in the best interest of the taxpayers that enterprise funds be self-supporting.
  • While the pricing policy should not permit the accumulation of excessive unrestricted net position, policy-makers can appropriately maintain a sufficient balance to permit replacement of inventory and capital assets, repayment of long-term debt, and acquisition or construction of assets as necessary to meet new or expanded operating needs.

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