Question

A city council designates funds in the enterprise fund for future equipment replacement. The enterprise fund should report this as: Group of answer choices An unrestricted component of net position. A net investment in capital assets. A restricted component of net position. A designated component of net position.

Answer 1

Answer: An unrestricted component of net position

Step-by-step explanation:

Fund balances can be committed, restricted, assigned, and unassigned. The designation of city council has no right to restrict funds.

A restriction of fund can only be imposed through legislation, constitution, or external resource providers, and not by the designation by the city council. In this case, funds would be unrestricted.