Balsam City's Library Board Is Appointed by the City Council

Multiple Choice

Balsam City's library board is appointed by the city council which has agreed to subsidize the operating costs of the library at a material amount to be determined each year.In addition,the city is paying debt service on general obligation bonds issued to construct the library.Based on generally accepted accounting principles (GAAP) criteria for defining the reporting entity:

A) The library is a component unit.
B) The library is not a component unit.
C) Financial data for the library's General Fund should be blended with the financial data for the city's special revenue funds.
D) The library can avoid being a component unit by establishing itself as a legally separate organization.