Definition of direct tax effect, 638. — The theory of the firm, 639. — Diagrammatic presentation, 642. — The tax ratio, 644. — The tax ratio as a variable: a progressive tax, 646. — Comparison of tax effects and interest effects, 647. — The tax ratio as a constant: a proportional tax, 649. — Plans of more than two years' duration, 650. — Effects of the tax on other economic parameters, 652. — Implications for the theory of investment, 653. — Other implications, 654.
THE ESSENTIAL ARGUMENT of this paper is that the new capital acquired by all the traders in a closed economy in a given period is given a putative or constructive turnover of once for the period by typical accounting procedure. It is possible to demonstrate the truth of this argument in a very convincing way in the case where unit prices are imagined to be constant over time, for in that case the concept of increase in cost value of all traders' stock of goods is clearly seen to be a construct itself in the sense that it is not really an excess of input at cost over output at cost. In any case the output of a given trader in physical units is the same as the physical input of the trader to whom he sells; so in any case the physical rate of output of all traders by trade is equal to their physical rate of input by trade. Moreover, the cost price of one trader at a given time is the selling price of a trader at an earlier stage of production at the same time if there is no price change. Let X, 2, 3, ... , represent the physical outputs (and inputs) at various stages of the productive process, while p1 2, 3, ..., i are the unit prices respectively. Then the money value of total inputs may be stated as Xipi+Xi_pi_-+ · , while the money value of the outputs are Xipi_l+Xi-pi-2_2+ Thus if Xi units of ore, limestone, labor, etc., in the form of pig iron are sold for pi dollars per ton, and the iron was made of cost elements worth p2 dollars per equivalent composite unit, the input of the buyer would be Xlpl dollars, and the output of the seller would be Xlp2 dollars. The difference between the value of total input at cost and total output at cost for all traders would be EXipi -Xipi_l. But this difference may be restated as follows:
This article stresses the need for both practical and theoretical accounting training in the U.S. Probably the ideal situation for a school is to have its accounting faculty include both the theoretical and the practical types of teachers, the natural leaning and emphasis of each offsetting and complementing the other. By planning the sequence of courses with this in mind, the students will receive some instruction heavily freighted with theory and some devoted mainly to the mechanics of accounting procedures. The results should be stimulating to both students and faculty. Whether a special service course in accounting is designed for a group that will not pursue the subject further, or whether the same introductory course is offered to all students, the proper balance between practical and theoretical training should be considered. When the elementary course is available to diverse types of students, it can be planned to give all of them a proper and satisfactory introduction to the subject. The teacher's presentation to the class should supplement material in the text, and should often disagree with some of it.
During 1940 the Curriculum Committee and the members of the Accounting Department of the Wharton School of Finance and Commerce, University of Pennsylvania, Philadelphia, Pennsylvania, made a study of the accounting curriculum to determine if it needed revision. As an aid in this study, two questionnaires were sent out, one to the Deans of the fifty-two other schools in the Association of Collegiate Schools of Business, and the other to 494 graduates in accounting. The answers received to these questionnaires were informative and helpful to the Committee and to the Department. With the thought that the data might be of interest to others this analysis and summary of the answers to the questions has been prepared. The replies of the graduates are considered first. As a result of the questionnaires sent to the graduates and to the schools, and the recommendations of the Accounting Department to the Curriculum Committee, the Faculty of the Wharton School of Finance and Commerce approved a new accounting curriculum. The new curriculum increases the semester credits offered in accounting from 31 to 39.
Richard Stone, D. G. Champernowne, J. E. Meade; The Precision of National Income Estimates, The Review of Economic Studies, Volume 9, Issue 2, 1 July 1942,