The City Created a Legally Separate Housing Authority to Provide

question 47

Multiple Choice

The City created a legally separate Housing Authority to provide low-income housing to residents of the City.The City issues debt for the Housing Authority in the name of the City, but the Housing Authority is responsible for repayment of the debt.The Housing Authority is governed by a board composed of all 5 members of the City Council.The Authority can take action based on the affirmative vote of a simple majority of the board.In what manner would the Authority be included in the City's Basic Financial Statements?

• A)Blended.
• B)Discretely presented.
• C)Note disclosure only.
• D)Not included in any manner.

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Definitions:

Book Value

The net value of an asset calculated as total assets minus total liabilities, shown on the balance sheet.

Units-Of-Production Method

A depreciation method that allocates the cost of an asset over its useful life based on the amount of production or use during the period.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or other declines in value.

Fixed Asset Turnover Ratio

A financial metric used to evaluate how effectively a company uses its fixed assets to generate sales.