Which of the Following Legal Entities File Documents with the State

question 6

Multiple Choice

Which of the following legal entities file documents with the state to be formally recognized by the state?

• A) Limited Liability Company.
• B) General Partnership.
• C) Sole Proprietorship.
• D) None of the choices are correct.

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Definitions:

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to a change in its sales volume, signifying the impact of fixed versus variable costs.

Variable Expenses

Costs that vary directly with the level of production or sales volume, such as raw materials, direct labor, and sales commissions.

Fixed Expenses

Costs that remain constant for a set period of time, regardless of changes in the level of production or sales volume.

Break-Even Sales

The amount of revenue required to cover both the fixed and variable costs of a business, resulting in neither profit nor loss.