Knowledge that Transforms

The purpose of the present paper is to ascertain just what graduate courses in accounting are offered by the universities listed by the collegiate department of the United States Bureau of Education as giving graduate work in applied economics. In order to simplify the figures, no distinction is made between a term course and a semester course. Likewise, no distinction is made between courses given only to graduates and those given to both graduate and undergraduates; strictly undergraduate courses are ignored. Data presented in the article shows that the graduate courses in accounting are largely concentrated in the basic subjects. While twenty-one different accounting studies are given, 71.7 per cent of the courses are given in the subjects that a student already familiar with the elementary principles of accounting must pursue. In order to become a professional accountant; and although prospective Certified Public Accountants (C.P.A.) candidates form only a small portion of the total number of accounting students, it still is advisable to offer adequate preparation for the C.P.A. examinations. The relatively weak showing of the subjects not absolutely needed in the professional accounting curriculum is due to the fact that accounting must be studied in logical sequence.

The division of the profit and lose statement devoted to distribution costs is receiving much attention of late, and rightly so, as, in many companies, the cost of distribution is seemingly way out of proportion to the manufacturing cost of the product which is being distributed. Furthermore, from the statistics which are being gathered by different bodies it appears that not only is the cost of distribution generally heavy, but that it is tending to make up an even larger proportion of total cost as time goes on. Distribution costs depend entirely on the nature of the business and the variety of the product. It appears that the time is past for asking the question: Can we produce all the sales department can sell? That has come to be a comparatively easy matter with most industries and in fact the pendulum has long since swung to the other extreme. With the extraordinary development of modern machinery it is going to be an ever increasing task for the sales department to dispose of all the factory can manufacture. This being the case, it is natural that distribution costs should continue to creep higher proportionately. Management is, undoubtedly, realizing that the big problem before it is not only to dispose of what can be manufactured but to dispose of it economically so that in the sale thereof a profit will be maintained.

The article provides information about latest developments in the accounting department of various universities and colleges in the U.S., as of June 1927. H.H. Chapman, associate professor of accounting in the University of Alabama, will be on leave of absence for the year 1927-28. Chapman will hold a fellowship at Columbia University , where he will complete his graduate work. Chester H. Knight has been promoted to assistant professor of accounting and will have charge of the accounting work during Chapman's absence. Professor W.A. Berridge of Rhode Island-based Brown University leaves the department to go with the Metropolitan Life Insurance Co. as economist. A. F. Hinrichs will take charge of instruction in statistics and direct research activities of the Brown Bureau of Business Research. G. K. Bigge comes from the University of Michigan as assistant professor of economics in charge of the work in labor and business administration. Thomas L. Norton, instructor in economies, leaves to continue his studies at Columbia University.

Reviews the book "Auditing Procedure," by DeWitt C. Eggleston.

The article presents information about managing public accounts, including accounts of various governments and of public institutions, and the discussion of problems relating to those accounts. It has often been assumed that the procedure commonly followed in keeping the accounts of private business can be applied without material modification to public accounts, which has led to the commission of many errors of principle. To understand fully the requirements of Public accounts, it is necessary to understand and take cognizance of the peculiar qualities in the organization of public business. Ownership in a public corporation is tested in the body politic or in those persons appointed or elected to constitute a corporate board or commission for the management of a public institution or political subdivision, who, however, sent as representatives at the electorate and not in their own right. The general purpose of a public corporation is to render service to the public at cost. Limitation of management, especially as to finances, appears at every point of business procedure.

Reviews the book "Municipal Finance," by A.E. Buck.

Reviews the book "Survey Course in Accounting," by Wesley James McCarty and L. Cleveland Amidon.

This article focuses on a provision of preferred stocks on a balance sheet. Preferred stock may have other rights and features. Examples are the redemption right, protection through maintenance of minimum net current assets or minimum ratio of current assets to current liabilities, protection through a sinking fund. The purpose of a balance sheet is to show the correct financial condition of a business as of a given date, stock preferences should be expressed in as much detail as is essential to fulfill this purpose. Further, as preferred stock is shown as a part of net worth, the problem of expressing preference's narrows down to a discussion of the net worth section of the balance sheet. Net worth, in its simplest form, consists of one kind of stock and surplus.

Reviews the book "Principles of Accounting," by Paul L. Morrison and Eric L. Kohler.

The article discusses the aim and method of accounting instruction in the State University of Iowa. The university has a two-year college of commerce, and, accordingly, the majority of the students are university juniors and seniors. First-year accounting work is offered, however, to pre-commerce sophomores who are technically students in the College of Liberal Arts. This work is entirely under the control of the College of Commerce and is placed in the sophomore year primarily to enable the student to secure some business background before coming in contact with commerce work proper. In other words university believes that a knowledge accounting principles is a desirable factor in the background which will enable the commerce student to make the most out of his two years in the College of Commerce. This course is prescribed for all commerce students. There is a "raison d'etre" for first-year work in accounting. University's experience has convinced it that the student's contact with the principles course in accounting furnishes him with a knowledge of business terms, procedures, and results which will aid him materially in mastering such counts as corporation finance, money and banking, industrial management etc.