A Business Formed by Two or More Individuals Who Each

question 43

Multiple Choice

A business formed by two or more individuals who each have unlimited liability for all of the firm's business debts is called a:

• A) corporation.
• B) sole proprietorship.
• C) general partnership.
• D) limited partnership.
• E) limited liability company.

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Definitions:

Unit Variable Cost

The cost that varies directly with the production output, altering with the volume of production.

Fixed Costs

Costs that do not change with the level of production or sales activities within a relevant range, such as rent, salaries, and insurance premiums.

Net Income

The total earnings of a company after subtracting all expenses and taxes from total revenue.

Break-even Level

The point at which total costs equal total revenues, resulting in neither profit nor loss.