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40. The City of Francois, Texas, is in the process of producing its current comprehensive annual finan- cial report (CAFR). Several organizations that operate

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40. The City of Francois, Texas, is in the process of producing its current comprehensive annual finan- cial report (CAFR). Several organizations that operate within the city are related in various ways to the primary government. Officials are attempting to determine how the city should report each of these organizations in the reporting process. a. What is the major criterion for inclusion in a government's CAFR? b. How does an activity or function qualify as a special-purpose government? c. How is the legal separation of a special-purpose government evaluated? d. How is the fiscal independence of a special-purpose government evaluated? e. What is a component unit, and how does a government normally report it on government-wide financial statements? f. How does a primary government prove that it can impose its will on a component unit? g. What is meant by the blending of a component unit?

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