The City created a legally separate Housing Authority to provide low-income housing to residents of the City.The City issues debt for the Housing Authority in the name of the City, but the Housing Authority is responsible for repayment of the debt.The Housing Authority is governed by a board composed of all 5 members of the City Council.Actions can be taken by the Authority upon receiving an affirmative vote by a simple majority of the board.The Housing Authority would be considered a:

Question

Quizplus · Accepted Answer

The Housing Authority is a legally separate entity created by the City, but is responsible for its own debt repayment and has its own governing board. Therefore, it meets the criteria to be classified as a component unit, which is a legally separate organization for which the City is financially accountable due to its significant financial interest and potential impact on the City's financial statements.

The City Created a Legally Separate Housing Authority to Provide