Mike,James,and Mary,advertising Consultants,enter into a Partnership and Name It Sensational

question 51

True/False

Mike,James,and Mary,advertising consultants,enter into a partnership and name it Sensational Adverts.About a year a year after the partnership is established,Mike and Mary have an argument and Mike tells the other partners that he will soon be leaving the partnership.A week later,Sensational Adverts is invited to submit a bid to produce an advert for a local beer company.Mike,who is the member of the partnership in charge of beer adverts,sees this as an opportunity to start his own business.Mike resigns from Sensational Adverts,starts his own company,and then submits a bid.Mike's bid is accepted.There is nothing legally wrong with Mike's conduct.

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Definitions:

Account Payable

An account payable is a liability representing an amount owed by an entity to a supplier or creditor for goods or services received but not yet paid for.

Return on Assets Ratio

The Return on Assets Ratio measures a company's ability to generate earnings from its assets, calculated by dividing net income by the average total assets.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments due on any type of debt.

Return on Assets Ratio

A financial metric used to evaluate a company's profitability relative to its total assets.