What is the primary purpose of an enterprise fund?

The primary purpose of an enterprise fund is to report services that are primarily self-supported by user charges. This means that the fund is typically used by governmental entities to account for activities that provide goods or services to the public for a fee. These services typically operate much like private businesses, where the revenue from user charges covers the expenses of operations, maintenance, and sometimes even capital improvements.

The use of an enterprise fund allows for transparency and accountability in how resources are utilized. By segregating the operations of self-supporting services, a government can better track the costs and revenues associated with these services. Examples of services that might be accounted for through enterprise funds include public utilities (water, sewer, and electricity), public transportation, and even parks and recreation facilities that charge admission.

In contrast to this, options that mention managing non-profit governmental programs or financing capital improvements through taxes do not align with the core characteristics of an enterprise fund, which is strictly about cost recovery through user fees. Additionally, accounting for governmental investment properties does not accurately reflect the function of an enterprise fund, as such properties would typically fall under different accounting practices in governmental financial statements.