Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 25

A city starts a public library that has separate incorporation and gets some of its money for operations from the state and some from private donations.Indicate whether each of the following independent statements is true or false and briefly explain each answer.
a.If the city appoints 9 of the 10 directors, it must report the library as a component unit.
b.If the library is a component unit and its financial results are shown as part of the governmental activities of the city, it is known as a blended component unit.
c.If the library appoints its own board but the city must approve its budget, the library must be reported as a blended component unit.