Matching
State whether each of the following is true or false regarding the financial reporting entity.Explain why the false statements are false.
Premises:
The relationships between two primary governments and a third organization may be such that the third organization can be a component unit of both primary governments.
An example of a state's ability to impose its will on the operations of a legally separate toll road is its ability to approve the road's proposed increases in toll rates.
Only general-purpose governments,like states,cities,counties,towns,and villages can be primary governments.Special purpose governmental entities,like school districts and hospitals,can never be primary governments.
When an organization is part of a primary government's financial reporting entity,the accounts of the former are always "blended" with the accounts of the latter;that is,the individual funds of the component unit are added to the funds of the primary government.
Responses:
False
True
Correct Answer:
Premises:
Responses:
The relationships between two primary governments and a third organization may be such that the third organization can be a component unit of both primary governments.
An example of a state's ability to impose its will on the operations of a legally separate toll road is its ability to approve the road's proposed increases in toll rates.
Only general-purpose governments,like states,cities,counties,towns,and villages can be primary governments.Special purpose governmental entities,like school districts and hospitals,can never be primary governments.
When an organization is part of a primary government's financial reporting entity,the accounts of the former are always "blended" with the accounts of the latter;that is,the individual funds of the component unit are added to the funds of the primary government.
Premises:
The relationships between two primary governments and a third organization may be such that the third organization can be a component unit of both primary governments.
An example of a state's ability to impose its will on the operations of a legally separate toll road is its ability to approve the road's proposed increases in toll rates.
Only general-purpose governments,like states,cities,counties,towns,and villages can be primary governments.Special purpose governmental entities,like school districts and hospitals,can never be primary governments.
When an organization is part of a primary government's financial reporting entity,the accounts of the former are always "blended" with the accounts of the latter;that is,the individual funds of the component unit are added to the funds of the primary government.
Responses:
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