Which statement is TRUE regarding the use of enterprise funds?

The use of enterprise funds is critical in governmental accounting, particularly under GAAP (Generally Accepted Accounting Principles). When we look at the statements regarding the use of enterprise funds, both the requirement and the permissibility of using these funds are important.

Enterprise funds are utilized in governmental accounting to account for activities that are operated in a manner similar to private businesses, providing goods or services to the public for a fee. The use of enterprise funds is often required in specific situations, such as when a government operates utilities or public transportation services. This aligns with the first statement, confirming that sometimes their use is indeed mandated by GAAP.

On the other hand, GAAP allows governments the discretion to establish enterprise funds for other activities that they choose to conduct as business-like operations, even if not strictly required. This flexibility is encompassed in the second statement regarding the voluntary use of enterprise funds.

Thus, the truth of both statements supports the conclusion that both the requirement for certain uses and the allowance for voluntary establishment of enterprise funds are valid under GAAP. This makes the choice indicating that both statements are true the most accurate.