Zack was a partner in a management consulting firm that specialized in assisting small businesses in the area of financial planning. The firm did not perform income tax services. However, since Zack had personal expertise in tax accounting, he frequently assisted friends, as well as some firm clients, in preparing their income tax returns. Usually he borrowed the firm's adding machine and other office supplies to perform this work from his home unbeknownst to his partners. Zack may be required to

A) retire from the partnership for breach of warranty of authority.
B) account to the other partners for any money received from his income tax service.
C) assign his share in the partnership to another to take his place in the partnership.
D) All of the responses are possible
E) None of the responses are possible.

Question

Natalie Perez · Accepted Answer

Final Answer : B, Explanation :  Zack may be required to account to the other partners for any money received from his income tax service because he used the firm's resources (adding machine and office supplies) for personal gain, which could be seen as a breach of his fiduciary duties to the partnership.

Definitions

Learning Objectives

Learning Objectives

Related questions