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GFOA CPFO Exam - Topic 9 Question 120 Discussion

Actual exam question for GFOA's CPFO exam
Question #: 120
Topic #: 9
[All CPFO Questions]

GAAP requires that the fees for enterprise fund services like water, sewer, and electricity offset costs. As a policy decision, governing board members choose among four water and sewer rate structures. Those are all EXCEPT:

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Suggested Answer: B

by Maryann at Jan 05, 2026, 05:16 AM

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Edgar
2 days ago
Wait, are we sure about that? Seems off to me.
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Corinne
7 days ago
Totally agree, B doesn't fit with the others.
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Cordelia
12 days ago
I think the answer is B) Changing Rate.
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Lai
17 days ago
Wait, are we supposed to know all the different water and sewer rate structures? This is getting a little too specific for my taste.
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Kimbery
22 days ago
Haha, "None of these" as an option? That's just the exam writer's way of saying, "Good luck, sucker!"
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Norah
27 days ago
This question is tricky, but I'm pretty sure the answer is B. Changing rate structures are not GAAP-compliant, right?
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Janessa
2 months ago
Ascending block rate structure? That's a new one to me. I'll go with C just to be safe.
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Quinn
2 months ago
Hmm, I'm not sure about this one. I think the correct answer might be D, since the question is asking for the one that is NOT a GAAP-approved rate structure.
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Glenn
2 months ago
The declining block and seasonal rate structures are definitely GAAP-approved, so I'm going with A.
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Annamae
2 months ago
I feel like I've seen "Changing Rate" in a different context, but I can't remember if it's actually a recognized rate structure for water and sewer services.
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Elvera
2 months ago
I practiced a question similar to this, and I think "None of these" could be the answer if all the other options are valid structures.
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Margurite
2 months ago
I think the declining block and ascending block rates are common, but I can't recall if "Changing Rate" is a standard term used in GAAP discussions.
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Armando
3 months ago
I remember studying different rate structures, but I'm not entirely sure what a "Changing Rate" is. It sounds unfamiliar.
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Stanford
3 months ago
I've got a good handle on this. I think the answer is C) Ascending block, since that wouldn't necessarily offset costs like the other options.
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Cecilia
3 months ago
Declining block and seasonal rate seem like they would offset costs, so I'll rule those out. Ascending block and changing rate are the ones I need to evaluate further.
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Omer
3 months ago
I'm a little confused by the wording here. Let me re-read the question and think through the options carefully.
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Alyssa
3 months ago
Okay, I know GAAP requires enterprise fund services to offset costs, so I need to focus on the rate structures that fit that requirement.
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Marjory
4 months ago
Hmm, this seems like a tricky one. I'll need to think through the different rate structures and which one doesn't fit the criteria.
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