This article focuses on the computation of schedule G for income averaging. Completion of Schedule G by simply following instructions line-by-line leaves something to be desired from a teaching point of view at least. Another approach to Schedule G is to visualize layers of income and this approach may give the student a better understanding of basic concepts involved and add interest to discussion.
The article focuses on accounting principles for the investment credit. Opinion number two of the Accounting Principles Board indicates three separate and acceptable methods of accounting for investment credit. Method number one follows the concept of tax law by treating the credit as a reduction of the cost of the asset and apparently it is the method favored by the majority of the Board. One important advantage of this method is that the depreciable base is ordinarily the same for tax and financial purposes. Method number two follows the concept that the credit is a direct reduction of tax expense to be pro-rated over the life of the asset. An interesting aspect develops when full current use of the Investment Credit is not possible because of the limitation in the law. The investment credit carry-forward may be applied against the tax liability in any one or all of the five succeeding years. The entries under each method would be to write off the carry-forward against the tax liability.
This article presents some comments on recently published research bulletins in the field of accounting. It first mentions chapter 9 of Research Bulletin #43 referencing the decision by the Accounting Principles Board that Accounting Research Bulletins issued by the predecessor committee on Accounting Procedure should be considered as "continuing in force with the same degree of authority as before." While conflicting statement occurred in the October 1961, Journal of Accountancy, expressing editorially that most of them will eventually be reviewed by the board but that it is not expected that many of them will be superseded in the near future. He further mentions chapter 4 of Bulletin #43, which relates to inventory pricing and includes the rule of cost or market. The author suggests that while other chapters of Bulletin #43 may eventually need revision, it appears that a revision of chapter 9 is most pressing to avoid confusion, inconsistency, and outright contradiction. Hence chapter 9 of Bulletin #43 should be among the first to be revised.
Survey courses are limited, apparently, to one semester or less and under such conditions it becomes educator's rather difficult and painful duty to devise teaching methods, which will, in the brief time allotted, convey a reasonably intelligent concept of basic principles and procedures. Results are unsatisfactory if the survey course is merely a duplication of the first semester of a standard one-year course. The usual and better procedure, the author believes, is to abridge the year course by a careful process of elimination and condensation. The author suggests, timidly, the elimination of any extended discussion of notes, bills of exchange, note registers, location of errors, business papers, merchandising activities, and various unusual and complex transactions. The purpose of a survey course differs entirely from that of a one-year course and it is not illogical, at least, that teaching methods in the two courses should differ. The author believes that a survey course should emphasize statements and if, by reason of a time limit, something must be slighted in the last few weeks he would prefer that material to be other than statement preparation and analysis.