GFOA CPFO Exam - Topic 9 Question 120 Discussion

Actual exam question for GFOA's CPFO exam

Question #: 120
Topic #: 9

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:

ADeclining Block and Seasonal Rate

BChanging Rate

CAscending block

DNone of these

Show Suggested Answer

Suggested Answer: B

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

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Luisa

17 days ago

I’m leaning towards D) None of these.

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Tegan

22 days ago

True, but "None of these" could be a safe choice.

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Juliana

27 days ago

But GAAP needs specific structures.

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Luisa

1 month ago

I feel like all options are valid though.

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Tegan

1 month ago

I agree, B seems off.

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Taryn

3 months ago

Because it doesn't fit with the others.

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Juliana

3 months ago

Why do you say that?

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Taryn

3 months ago

I think the answer is B) Changing Rate.

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Luisa

3 months ago

This question is tricky!

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Kirk

3 months ago

None of these options seem wrong to me!

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Chu

4 months ago

Declining Block is a common one, so it can't be B.

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Edgar

4 months ago

Wait, are we sure about that? Seems off to me.

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Corinne

4 months ago

Totally agree, B doesn't fit with the others.

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Cordelia

4 months ago

I think the answer is B) Changing Rate.

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Lai

4 months 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

4 months 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

5 months 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

5 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

6 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

6 months ago

The declining block and seasonal rate structures are definitely GAAP-approved, so I'm going with A.

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Annamae

6 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

6 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

6 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

6 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

7 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

7 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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