Which of the Following Circumstances Would Indicate That a Potential

question 5

Multiple Choice

Which of the following circumstances would indicate that a potential component unit (PCU) should be included as part of the government financial reporting entity?

• A) The primary government is entitled to the resources of the PCU.
• B) Officials of the primary government appoint a majority of the members of the governing board of the PCU.
• C) The primary government significantly influences the programs and activities of the PCU.
• D) Officials of the primary government appoint a majority of the members of the PCU's governing board and the primary government is able to impose its will on the PCU.