Which of the Following Circumstances Would Indicate That a Potential

Multiple Choice

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

A) The primary government does not approve the operating budget of the potential component unit.
B) Officials of the primary government appoint a majority of the members of the governing board of the PCU.
C) The PCU has sufficient operational and financial dependence that the primary government can impose its will on 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.