The county created a legally separate county hospital authority. Members of the board of the county hospital are elected in county-wide elections. The county must approve the budget of the hospital, but the hospital receives no financial support from the county, except that the county pays the hospital bills for county indigents. All revenues of the hospital are user fees. The county hospital would be considered a(n)
A) Primary government.
B) Component unit.
C) Related organization.
D) Affiliated organization.

Question

Quizplus · Accepted Answer

The county hospital is considered a component unit because it is legally separate from the county but the county is financially accountable for it, as indicated by the requirement for county approval of the hospital's budget and the county's obligation to pay hospital bills for indigents.

The County Created a Legally Separate County Hospital Authority