Which criteria indicate that an organization is a component unit?

An organization qualifies as a component unit when it meets specific criteria that indicate a relationship with a primary government. One key criterion is financial accountability, which is established when the elected officials of the primary government are financially accountable for the organization. This means that the primary government has the ability to significantly influence the organization’s operations and fiscal decisions, often through appropriations or oversight. Therefore, the presence of elected officials being financially accountable for the component unit shows a direct relationship that necessitates the unit's inclusion in the primary government’s financial statements.

This connection is essential in governmental accounting as it provides a comprehensive view of the financial position and activities of the primary government and its related entities, ensuring transparency and accountability to the public. The other scenarios presented would not lead to the classification of an organization as a component unit, as they do not align with this definition of financial accountability.