A Note on the Economics of Retaliation Get access T. Balogh T. Balogh Oxford Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 11, Issue 2, 1944, Pages 86–90, https://doi.org/10.2307/2295969 Published: 01 January 1944

Journal Article Rents, Rates and Incomes in Bristol Get access A. W. T. Ellis A. W. T. Ellis Bristol Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 11, Issue 2, 1944, Pages 99–108, https://doi.org/10.2307/2295971 Published: 01 January 1944

The article presents information about problems that were presented by the Board of Examiners of the American Institute of Accountants as the second half of the May, 1944 examination in accounting practice. The first question asked for the preparation of a balance-sheet and an income account for the year ended December 31, 1943 of Moran Realty Company on the basis of some information provided. The second question asked for the preparation of a statement of factory accounts, showing costs, variances and inventory balances of the Taylor Manufacturing Company on the basis of given data. The third question required computation of net income of The Baltic Corporation for its 1943 federal income-tax return and preparation of a reconciliation of taxable net income and net income as per information provided by their books. The first question carried 25 points, the second question was assigned 15 points and the third question was allotted 10 points. All questions had to be solved within a time frame of 240 minutes.

Too frequently in the past the application-of-funds statement, if used by the auditor, has been included as a schedule or exhibit in the back part of the report. In too many cases also, the main application-of-funds statement has been supported by a working-capital schedule, which served as a catch-all for items that seemed difficult to classify and which served no especially useful purpose not covered by a comparative balance sheet. As a result of such type of presentation, the application-of-funds statement has been growing less and less significant to the executive and has been practically ignored by many in the process of examining an auditor's report, even when the report contained such a statement. The application-of-funds idea, however, is too valuable to have its real existence jeopardized by an unfortunate selection of form and location in the auditor's report. The main purpose of an application-of-funds statement or summary is to answer a type of question regarding the financial status and operating results which is not answered by the balance sheet or operating statement.

The article presents details of problems presented by the Board of Examiners of the American Institute of Accountants as the first half of the May 1944, examination in accounting practice. The time allowed to solve all problems was four and a half hours. Accountants are supposed to prepare from the following data a statement of net assets of A as at December 1-10, 1943 and changes during the period ended December 10, 1943. A, a sole proprietor, intends to form a partnership with B, Because of A's failure to keep records, however, he cannot furnish to B statements indicative of financial position and earnings to serve as a basis for determining the respective capital interests of the prospective partners and for reaching agreement on other financial matters. Accordingly, it is agreed between A and B that A should continue operating as a sole proprietor for a six-month period ending May 31, 1944 and to keep proper accounting records to serve as a basis for the drafting of a satisfactory partnership agreement.

The article presents three problems, which were presented by the Board of Examiners of the American Institute of Accountants as the second half of the November, 1943 examination in accounting practice. Each problem was assigned weights as follows: problem 1, 14 points, problem 2, 20 points, problem 3, 16 points. The time allowed to solve all problems was four and a half hours. In problem 1, columnar work schedule was supposed to be prepared with the help of data given in the problem. In problem 2, with the help of certain data given in the problem, students were asked to prepare a columnar work schedule showing the June 30, 1943, balance sheet before and after the proposed reorganization, with explanatory adjustment columns for the necessary changes in several balance sheet items. Students were also asked to prepare a statement showing the effect of the proposed reorganization upon annual bond-interest and amortization charges and dividend requirements. In problem 3, students were asked to prepare a comprehensive columnar work-sheet showing adjustments to the bookkeeper's statement with the help to certain data given in the problem.

The article presents problems presented by the Board of Examiners of the American Institute of Accountants as the first half of the November, 1943 examination in accounting practice. From the data given, students were required to prepare a consolidation of balance-sheets of the Top Holding Company and its subsidiaries. The investments in R Co. stock are carried at cost less subsequent net losses, investments in S Co. stock at cost. Bonds were acquired at $1,500 discount and are held for cancellation. Students were required to prepare statements of principal and income for the executor, covering the period from January 15 to January 31, 1943. In another problem businessman Alex Dunn, Jr., died on January 15, 1943, his records disclose certain estate. On July 1, 1925, the late Alex Dunn, Sr., created a trust fund, with his son, Alex Dunn, Jr., as life tenant, and his grandson as remainderman. The assets in the fund consist solely of the outstanding capital stock of Dunn Inc., namely, 2,000 shares of $100 each. Students were required to prepare the cash settlement between partners, taxable profit or deductible loss of partners and tax basis to purchasers of assets bought December 31, 1942.

The article presents information about a Committee appointed by the American Accounting Association. The work of the Committee on Monographs during the year, 1943, has been devoted primarily to two projects. The first consisted of preparing a compilation of the releases and pronouncements on accounting matters issued by the Securities and Exchange Commission, the Committee on Accounting Procedure and the Committee on Auditing Procedure of the American Institute of Accountants. The second project was the preparation of a monograph on the principles of consolidated statements. This monograph was written by Dr. Maurice Moonitz of Stanford University, and was reviewed and approved for publication by the Committee. The Committee has also given some attention to two or three other projects and manuscripts. The president of the Committee said that the educational institutions and programs are all being subjected to special stresses and difficult restrictions during the war. The programs of most colleges and universities in fields customarily followed by men have had to be materially curtailed or completely eliminated.