Steve Has Been Disgruntled with His Firm for Some Time

question 73

Multiple Choice

Steve has been disgruntled with his firm for some time and is secretly planning to leave and start his own manufacturer representative firm with the contacts he has made. Steve has been making copies of the firm's file-secured customer lists, supplier lists, pricing guides, and financial information which is routinely circulated to the staff.

• A) If Steve leaves and contacts the customers of his former firm, there is a good chance that he will be liable for damages caused by his taking this information.
• B) Steve shouldn't have made copies on the old firm's copy machine but taken the originals to an outside copy service.
• C) Steve's former firm will have a difficult time stopping Steve because it did not protect its information.
• D) Customers who switch to Steve's new firm will be liable to Steve's former firm for lost profits.

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Definitions:

Extraordinary Item

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, requiring separate disclosure in financial statements for clarity.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, ultimately revealing the net profit or loss.

Internally Generated Patent

A patent developed through a company's own research and development efforts.

Research and Development

Activities undertaken by businesses or organizations to innovate and introduce new products or services, typically involving substantial investment.