Which of the following is one of the two basic criteria that makes a primary government financially accountable for a legally separate entity?
A)The primary government's chief executive appoints three of the entity's trustees.
B)The primary government appoints a voting majority of the entity's governing body.
C)A department of the primary government can make grants to the entity.
D)A department of the primary government is authorized to obtain and review the entity's financial statements.

Question

Quizplus · Accepted Answer

The basic criteria that makes a primary government financially accountable for a legally separate entity are if the primary government appoints a voting majority of the entity's governing body or if the primary government has the ability to impose its will on the entity. Option A is incorrect because the appointment of trustees does not necessarily give the primary government financial accountability for the entity. Option C is also incorrect because providing grants does not establish financial accountability. Option D is incorrect because the ability to obtain and review financial statements does not necessarily make the primary government financially accountable.

Which of the Following Is One of the Two Basic