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EXPLAINING ANNUITY FORMULAS.

J. Donald Watson
The Accounting Review 1936 11(4), 388-389
The article focuses on interpreting the two principal annuity formulas. It is assumed that the student already understands the formulas for compound interest and compound discount and recognizes them in the said formulas. For calculating annuity, most of the students employ the formula for the sum of a geometric progression. However, the two principal annuity formulas can be explained without reference to a geometric progression and in terms that a student can understand and remember. Without referring to a geometric progression, the author attempts to show why the first formula is compound interest on one divided by the interest rate per period and why the second formula is compound discount on one divided by the interest rate per period. The author believes that the explanations presented in the article are preferable to the usual textbook discussion because the student can see why the annuity formulas are as they are; namely, compound interest on one divided by the interest rate per period and compound discount on one divided by the interest rate per period.

INFLUENCE OF THE SECURITIES AND EXCHANGE COMMISSION UPON ACCOUNTING PRINCIPLES.

T. H. Sanders
The Accounting Review 1936 11(1), 66-74
The substance of the power of the Securities and Exchange Commission, in so far as it concerns accounting, derives from that passage in the Securities Act which in effect enables the Commission to stop the issue of new securities if it appears to the Commission at any time that the registration statement includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading. For the Commission the various items of a balance sheet and of an income statement are material facts, and what in accounting parlance is often referred to as the disclosure or non-disclosure of information becomes in the law the statement or omission of material facts. The corresponding powers in the Exchange Act make it unlawful for any member to effect any transaction in any security unless a registration is effective as pit scribed by the Commission.

CONVENTION REPORT.

The Accounting Review 1936 11(1), 74-79
The article presents information on the proceedings of the twentieth annual convention held in New York. The American Institute of Accountants has asked for the cooperation of the American Association of University Instructors in Accounting in shaping a set of definitions of accounting terms. A special committee of the Institute had drawn up suggested definitions for over 1,000 terms and copies of these were furnished to this association through K. L. Kohier of the Institute's committee. Under a call for new business, R. B. Kester responded by directing the attention of the meeting to the opinion held by some that the activities of the association were not all that they should be. He expressed the opinion that the purposes and membership of the association should be broadened. He pointed out that such an organization as ours is the logical one to carry on organized research in the field of accounting theory, but is hindered to a very considerable degree by its name and limited membership. He told the members present of the American Accounting Association incorporated recently in the State of Illinois by a small group of members to engage in research in accounting. He expressed the opinion that there was hardly room for both the American Association of University Instructors in Accounting and the American Accounting Association, and asked for expressions of opinion of the members present as to what might be done about the matter.