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.

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Definitions:

Starter Relay

An electrical device that switches a large current to the starter motor, initiating the engine's operation.

Jumper Wire

A short electrical wire or conductor used to bridge or bypass part of an electronic circuit, allowing for testing or reconfiguration of the circuit.

Starter Solenoid

An electromagnetic switch that engages the starter motor of an internal combustion engine to initiate the engine's operation.

Profitability Index

A calculation that measures the relative profitability of an investment, determined by dividing the present value of future cash flows by the initial investment cost.