Knowledge that Transforms

Reviews the book "Financial and Cost Accounting for Management," by A.H. Taylor and H. Shearing.

In this article, the author discusses the theory and practice of accounting. He differentiated between beliefs and theories, defines propositions and highlights that a theory of accounting includes a collection of propositions or assertions. He emphasizes that recorded experience is not part of a theory of accounting but is one of the sources which give rise to propositions. He explains the two aspects to the study of accounting, namely, the pure aspect and the applied aspect and their provinces. He stresses on the importance of the separation of entities for the purpose of accounting and the inclusion of propositions in a theory of accounting while ignoring the practical procedure. He illustrates different propositions in a theory of accounting which include records, ascertaining profit and determination of depreciation. The net effect of the entity's transactions and the position of the entity have been described as results obtained from the application of propositions to entities and the requirement by law to obtain certain results from certain accounting entities have been enumerated. The author describes accounting as a theory and as a practice.

Reviews the book "The Stock Market," by George L. Leffler.

Reviews the book "Accounting For Intra-company Transfers."

Reviews the book "Accounting Fundamentals," 3rd ed., by George A. MacFarland, Robert D. Ayars and Williard E. Stone.

The article reports on the events in the field of accounting education. George Gibbs was reappointed to a four-year term on the state board of accountancy. E.I. Fjeld, formerly of the College of the City of New York, joined the staff in September as visiting professor of accounting. Willard Horwich was appointed assistant professor of accounting this fall. T. Leroy Mami conducted a three day Institute in Hospital Accounting under the auspices of the Mississippi Hospital Association at Gulf port in July. May Noel Barron returned to the campus after a 15-month leave of absence, during which time she served as assistant auditor for the State of Kentucky. Emerson C. Erb has been granted leave of absence for one year to continue work on his doctorate at Indiana University. William D. Tuxbury was added to the staff in September. H. Calvert Krueger has accepted a position at Arizona State College. Francis D. Jabara received his CPA certificate in Kansas last December. The Second Annual Petroleum Accounting Conference was held on the campus in May with over 250 persons attending.

The article discusses about the planning concepts in the "tentative statements of cost concepts." In this article, a portion of that document is discussed from the point of view of the business manager who would attempt to apply it. It is the purpose of this paper to examine the cost for planning portion of the statement. The business manager has been told that he is to discount future outlays, necessarily measured outlays, at an appropriate rate of interest; again he is later told that future costs, that lend themselves to measurement, are to be discounted at a rate which reflects time, risk, uncertainty, etc., and finally he is told other costs which cannot be measured, but must be "considered." To the business manager's way of thinking, any cost to which a dollar and cents figure is attached has been measured; and in essence he has been told to handle these costs in three quite different ways. All costs in the future, by the very nature of the uncertainty of the future and the time element involved, carry some element of risk which must be allowed for. In conclusion, the authors stated that it is much, much easier to criticize original thinking than to do that same thinking. The tentative statement has certainly accomplished one of its main objectives, i.e., to stimulate further study and discussion of the accounting information needed by management, but also has gone well beyond.

Businessmen today are well advised not to make any decision of importance without first considering the tax effects, a wrong decision may have serious con- sequences. This problem is intensified by the fact that tax concepts and procedures become more involved and complex with each new addition to or revision of the tax law. Due to the growing importance of tax practice in relation to the total scope of the accountant's activities, the accounting major, whether he plans to enter the field of public accounting or not, should become thoroughly grounded in income tax procedures in order to be able to advise his clients or his employer wisely, taxwise. A sound background is necessary for the most effective study of tax accounting. The subject matter of tax accounting includes many subjects covered in public finance. In working with problems concerning capital assets and dividends, the study of corporate finance should prove most helpful. In such a course one would get detailed coverage of stocks and bonds and their derivatives, dividends and interest and problems relating to both the issuer of and the investor in corporate securities.

Reviews the book "Audit Practice Case," 4th ed., by Harvey G. Meyer.

The subject of the tax basis of property and the related subject of gains or losses on disposals are probably the most difficult subjects for most students in an introductory income tax course. Students tend to become rather badly lost among the maze of general rules, exceptions and exceptions to exceptions which cover the various situations. Where appropriate, journal entries are used to help explain the treatments. The outline itself is not complete in this respect. Accordingly, in the class discussion considerable time is spent on this phase. The outline has been given to the students after they have already had one or two days on basis material and have struggled with it for a while. The use of the outline has not produced any startling improvement in student comprehension of the material covered. Many still remain confused. However, there is evidence that on equivalent examinations, grades have been somewhat improved over scores in past semesters before the outline was used.