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A legally separate organization for which the elected officials of the primary government are financially accountable describes a
Suggested Answer: B
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A component unit is a legally separate entity for which the elected officials of the primary government are financially accountable. This accountability may arise if the primary government:
Appoints a majority of the governing board, and
Is able to impose its will or has the potential to receive financial benefits or bear financial burdens.
Component units are reported in the financial statements of the primary government, either as blended or discretely presented entities.
Relevant Standards and Reference:
GASB Statement No. 14, The Financial Reporting Entity
GASB Statement No. 61, The Financial Reporting Entity: Omnibus
GASB Codification Section 2100: Defining the Financial Reporting Entity
Therefore, Option B is correct.
33 comments · newest first
RO
Rolland
10 months ago
Wait, are we sure about that? Sounds off.
ME
Mendy
10 months ago
Totally agree, B is the right answer!
MA
Marcos
10 months ago
Interesting, I never knew that distinction before!
BE
Belen
10 months ago
I thought it was a joint venture entity, but I guess not.
GE
Gerardo
11 months ago
It's definitely a component unit.
TU
Tu
11 months ago
I vaguely recall that component units are related to financial accountability, so I’m leaning towards option B, but I could be wrong.
MI
Mindy
11 months ago
I'm a bit lost on this one. I feel like I need to review the differences between joint ventures and component units again.
WE
Weldon
11 months ago
I remember practicing a question similar to this, and I think the answer was definitely component unit. It just fits the definition better.
EU
Eun
11 months ago
I think this might be about component units, but I'm not entirely sure if it could also refer to fiscally dependent organizations.
MA
Ma
12 months ago
I'm feeling pretty confident about this one. The description matches the definition of a component unit, which is a legally separate organization for which the elected officials of the primary government are financially accountable.
BL
Blair
12 months ago
Okay, let me break this down. The key is that the elected officials of the primary government are financially accountable for this separate organization. That sounds like a component unit to me.
WI
Willard
12 months ago
Hmm, I'm a bit unsure about this one. I'll need to re-read the question and think through the definitions of these different types of organizations.
LE
Lezlie
1 year ago
This question seems straightforward, I think the answer is B - component unit.
FA
Fallon
1 year ago
B) component unit makes the most sense to me. Legally separate, but financially accountable to the primary government. Sounds like a classic component unit scenario.
JA
Jacqueline
1 year ago
B) component unit makes the most sense to me.
AJ
Aja
1 year ago
A) fiscally dependent organization.
AV
Avery
1 year ago
Ha, this question is a real head-scratcher! Maybe the answer is C) joint venture entity, and the primary government is just really bad at managing their finances.
ME
Melinda
1 year ago
No, I believe it's A) fiscally dependent organization, because the primary government has financial control over it.
BE
Bethanie
1 year ago
I think the answer is actually B) component unit, where the primary government is financially accountable for the separate organization.
AL
Alana
1 year ago
I believe it's B) component unit because the primary government has financial accountability.
DI
Dion
1 year ago
I'm not sure, but I think it could also be A) fiscally dependent organization.
AS
Ashlyn
1 year ago
I'm going with D) jointly governed organization. That sounds like the best fit to me, though I'm not 100% confident.
NI
Nidia
1 year ago
I agree with you, B) component unit seems like a good fit for the description.
GL
Glory
1 year ago
I think B) component unit might be the correct answer.
CA
Carol
1 year ago
Hmm, I'm not sure. Could it also be a fiscally dependent organization? Seems like the primary government has some financial control over it.
KE
Kerry
1 year ago
B) component unit.
RE
Regenia
1 year ago
A) fiscally dependent organization.
GI
Gilberto
1 year ago
I think the answer is B) component unit. The description sounds like a legally separate organization that the primary government is financially accountable for.
KA
Kandis
1 year ago
I'm not sure, but jointly governed organization doesn't seem right.
AM
Amie
1 year ago
I think it could also be a fiscally dependent organization.
LU
Luther
1 year ago
I agree, it does sound like a component unit.
JO
Johnna
1 year ago
I agree with Virgilio, a component unit makes sense.
VI
Virgilio
1 year ago
I think the answer is B) component unit.