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. If the city appoints 9 of the 10 directors, it must report the library as a component unit. 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. If the library appoints its own board but the city must approve its budget, the library must be reported as a blended component unit.
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. If the city appoints 9 of the 10 directors, it must report the library as a component unit. 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. If the library appoints its own board but the city must approve its budget, the library must be reported as a blended component unit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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.
- If the city appoints 9 of the 10 directors, it must report the library as a component unit.
- 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.
- If the library appoints its own board but the city must approve its budget, the library must be reported as a blended component unit.
Expert Solution
Step 1
Determine the following statement is true or false with a brief explanation.
If the city appoints 9 of the 10 directors, it must report the library as a component unit: This is a true statement because the primary government has the major voting rights of the governing body. It has the authority to elect the majority of the directors to the library.
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