Knowledge that Transforms

Abstract Questions on treasury stock may be resolved into two fundamental issues, both of which concern the right of a corporation to acquire shares of its own capital stock and which, from that circumstance, are frequently presented without adequate distinction. The right of control incident to ownership is a right which civilization has made an inherent part of itself. "It is mine; I can do with it what I will." This theory applied to the funds of a corporation expresses a natural right of a corporation to acquire shares of its own capital stock. Can a corporation legally acquire shares of its own capital stock? It is understandable that the judges of the state courts during the early years of the nation, having varying degrees of legal education and historic perspective, should have decided this question yes and no. Two contiguous states, whose citizens had very similar social and ancestral backgrounds, took opposing views on this question. In both states the English principles of jurisprudence predominate.

Abstract There is a close parallelism between the development of law and the development of accounting. Both arise out of a world of concrete relations and they must maintain contact with that world or lose their strength. If there is any general criticism to be made of the tentative Statement of Principles prepared by the Executive Committee of the American Accounting Association, it is that the statement shows inadequate recognition of the fundamental principle that all accounting principles and practices must preserve a vital functional relationship to a world of changing economic facts. Roughly speaking there are three major functions served by accounts. In the order of their development, these functions are the record function, the control function and the protection-of-equities function. The control function goes back at least as far as the beginning of the practice of closing the books regularly but its major development has been of very recent date especially in connection with modern industrial accounting.

Abstract This paper is predicated on the assumption that the usefulness of various forms of objective tests have been established in the field of college accounting courses beyond the need of further argument. It is the purpose of this paper to discuss certain procedures for further testing and improving such objective-type examinations. The writer has observed that an objective type examination which has been carefully drawn up probably does not contain any higher percentage of poor items than does a problem or essay type, but it so happens that in the typical objective examination the "boner" items stand out so that they can be spotted much more surely than unreliable items of the older type. If this observation is correct, it of course constitutes one more argument in favor of the objective-type examination. The general technique discussed has appeared in some of the education texts for ten or fifteen years and has also been in use extensively by the Federal Civil Service Commission, but some of its implications do not seem to have been fully discussed, nor does it seem to have been developed as thoroughly as it deserves-certainly not in university accounting circles.

Reviews the book "Municipal Bonds," by A.M. Hillhouse.

Reviews the book "Taxable Income," by Roswell Magill.

Reviews the book "How to be a Good Foreman," by Charles Reitell.

Abstract The science of business economics is looked upon in the German-speaking countries as a particular and largely independent branch of the general science of economics. From a broad standpoint it has the same objective and content as American business organization and administration. But upon closer examination it is seen to be more theoretical, more pretentious of being an independent, compact science parallel to economics and more thoroughly permeated throughout with accounting. In its modern phase German business economics is of very recent origin, having begun hardly more than fifteen years ago. From the standpoint of its complete history, however, it must be considered to have had a fairly early origin in as much as it first appeared in full bloom during the seventeenth and eighteenth centuries. During that period English and French Mercantiism and Physiocratism were at their height. In place of the ideas associated with those two schools of economic thought, however, there were present on German soil the two main early stages of German business economics "cameralism" and what may be translated as the "science of trade."

Reviews the book "Bank Accounting Practice," by L.H. Langston.

Reviews the book "Money and Banking," by Charles L. Prather.

Abstract There are various methods of book keeping prevalent in the world, each requiring a specific technique. For instance, there are Italian, English, German, French and American bookkeeping methods in accordance with conditions peculiar to the country. In reviewing the introduction of double-entry bookkeeping into Japan, it will be best to differentiate between the introduction of the technique of double-entry bookkeeping and the importation of literature on book-keeping. The introduction of technique will be dealt with first. The introduction of the technique of double-entry bookkeeping may be said to have occurred in the latter part of the Tokugawa Shogunate. All the merchants in Japan in the Tokugawa Era were using single-entry bookkeeping. However, the Japanese "Industrial Revolution," which took place during the latter part of the Tokugawa Shogunate and during the Meiji Restoration, indicated the importance of European machinery and equipment and the industrial system gradually adapted itself to the European mode. Accounting for business transactions had become so complicated that the hereditary Japanese system could hardly do justice to the new business methods, so considerable impetus was given to the introduction of European accounting methods.