Knowledge that Transforms

Abstract Reviews the book "The Board of Directors and Business Management," by Melvin T. Copeland and Andrew R. Towl.

Abstract Reviews the book "Bookkeeping," by Ernest A. Zelliot and Walter P. Leidner.

Abstract Reviews the book "Industrial Accounting," by Samuel W. Specthrie.

Abstract The lack of exceptions, qualifications, or explanations concerning consistency is somewhat disturbing to the critical reader in a period of rapidly changing economic conditions from phase of the business cycle to another. From one tax law to another with changes in products, distribution methods, and administrative organization, with changes from a controlled economy to one of relative freedom, with labor unrest, inflation, and unsettled international economic conditions, it would seem that an audit would quite often result in some material differences of opinion on accounting principles which failed of reconciliation. The principles of accounting so consistently applied by corporate management that the residual unresolved differences of opinion are almost invariably minor in character and not deserving of mention in the accountant's opinion report of the public accountant which can almost invariably declare that generally accepted accounting principles are applied on a basis consistent with that of the preceding year.

Abstract The primary benefit accruing to farmers' cooperatives are the right to exemption from federal income taxes and the right to use the hank for cooperatives. Several federal statutes define and describe the prerequisites for these benefits. The most important of these provisions is found in Section 101 of the internal-revenue code dealing with exempt organizations and, more specifically, paragraph 12. The exemption from federal taxation is not automatic and it is not sufficient that the organization qualify as a matter of operation and organization. Form 1028, Exemption Affidavit, must be filed with the U.S. Treasury Department and a definite letter must be received from the Department before the exemption is effective. This form is an informational form and requires data as to the provisions of by-laws, charter, marketing agreements, etc. If the request filed after the beginning of operations, a detailed balance sheet must be submitted as well as a "classified statement of the receipts and disbursements'' during the current year. Unless the Commissioner has determined that an organization is exempt, it must prepare and file an income-tax return for each taxable year of its existence. A large number of farmers' cooperatives are not tax exempt. Many associations may not be so organized as to meet the specific qualifications for exemption. In other cases the associations may prefer to have a nonexempt status if management and owners believe that it is more advantageous to be taxed than to meet the statutory conditions of exemption. It is possible for these associations to be organized and operated is such a way that there is little taxable income.

Abstract The Statement of Principles provides a guide for determining costs of research and development contracts. It should assist in both the formulation and the administration of such contracts and should help representatives of educational institutions as well as personnel of the Army and the Navy. This guide should prove to be extremely helpful in the drafting of contracts since it points up specifically which types of costs customarily require contract authorization and which costs are reasonably assignable to the contract in the absence of prohibitive or permissive provisions in the contract. The Statement of Principles should facilitate the drafting of contracts which will be coordinated with the intentions, suggestions and words of warning included in the Statement of Principles. The principal contribution of the Statement of Principles will be in relation to indirect expenses. No single document of this type can settle, in advance of actual performance, all of the questions which will arise regarding expenses to be prorated and the most equitable methods of prorating such expenses. However, the Statement of Principles does bring to a conclusion many points which have caused endless discussion and prolonged negotiation in the past. Some of these points have been resolved in a highly arbitrary manner; nevertheless, here are special answers which appear to be generally practicable. The Statement of Principles is stated for the most part in accounting terms and has been built around accounts and accounting categories of expenses and costs. However, it is not an accounting document, and should not be considered as such. It is a realistic and matter-of-fact survey of the types of costs encountered in the performance of a research or development contract for the Army or the Navy by an educational institution.

Abstract The article presents the use of slides in accounting instructions. During 1937 Accounting Department at the Ohio State University, purchased a 3X4 slide projector. Most of the slides consisted of solutions to problems and were used in classes which could be scheduled to meet in the room equipped for projection. It is not necessary to prepare separate copy for each slide in a step-by-step series. All of the slides in the worksheet series were prepared from a single copy of the complete illustration. This was accomplished by blocking out portions of the copy with white paper. The projector can be adapted for use in various size classrooms by means of lenses of different focal lengths. This type of machine because its fan is noisy, can he used more effectively if it is placed behind the students. The fan is necessary because of the high wattage of the lamp required to permit projection in a lighted room. Any type of white surface is suitable for use as a screen for black and white projection.

Abstract Reviews the book "Fitting Yourself for Business," by Elizabeth Gregg MacGibbon.

Abstract The article presents an overview of the problems which arise in connection with the lecture method in accounting. The University of California has for some time been noted for an extensive use of large lectures in many courses, including some of the courses in accounting. The men in charge of the laboratory work in the advanced courses have the rank of Associate, have a master's degree and are working towards the doctorate. Those in charge of the sections in the elementary course ordinarily are graduate students working towards the MBA degree, and they are given the title of Teaching Assistant. There are five lecture sections in elementary accounting, including both semesters of the course. Correlation of the lecture and laboratory sessions is another problem. Attempts are made to work out an approximately uniform procedure for handling the lectures and laboratory work, particularly as to the emphasis which is to be placed upon certain points. Lectures alone without the laboratory would certainly be very ineffective. A group of good graduate students can often do a better job for the beginning students than a group of part-time instructors drawn from accounting practice.

Abstract Reviews the book "Pluration of Income in State Taxation," by George T. Altman and Frank M. Keesling.