In Which of the Following Situations Would a Component Unit

question 16

Multiple Choice

In which of the following situations would a component unit be required to prepare a CAFR, not just the basic financial statements?

• A) The primary government prepares a CAFR.
• B) The component unit will be issuing general obligation bonds in the coming year.
• C) The component unit has prepared a CAFR in the past.
• D) There are no situations in GAAP where any entity is required to prepare a CAFR.

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Definitions:

Bad Reputation

The negative perception or judgment held by the public or a specific group about an individual, organization, or entity, often resulting from past actions or behaviors.

Grapevines

Informal and unofficial channels of communication within an organization, often spreading rumors or unverified information.

Incorrect Information

False or inaccurate data or details that can lead to misunderstandings or erroneous outcomes.

Major Barrier

A significant obstacle or hindrance that prevents or impedes progress toward achieving a goal or objective.