Abstract One difficulty in discussing depreciation is in distinguishing between the fact of depreciation and the recording of the fact in the accounts. The fact is itself a physical or economic phenomenon. There is almost universal agreement that a physical asset does, in the process of use, wear out, at least to the extent of making its continued use uneconomical. The economic phenomenon which may be correlative with the physical phenomenon, but may often-times be independent thereof, is that with continued use of a physical asset the services which it renders tend to become exhausted. Hence, in the absence of disturbing outside influences, thee lessened number of service units which the asset remains capable of yielding are of less value than were the larger number originally embodied in the asset. Accounting does not concern itself with the actual wearing out of an object. But in so far as the wearing out of an asset, or the exhaustion of its potential services affects the value to be ascribed to the asset by the going concern, accounting is called upon to make some record of such changes.

Abstract Presents the short story "Fable," by Henry R. Hatfield.

qReviews the book "Accounting for Value As Well As Original Cost," by H.G. Baldwin.

Abstract This article focuses on an accounting paradox. If one purchases at par $2,000,000 bonds bearing 5 per cent interest he will receive $50,000 each half year as interest, and at the maturity of the bonds will be repaid his investment of $2,000,000. In this case the amount collected each six months, by cashing the coupons, is the exact amount of interest earned for that period. No adjustment need be made and the amount of cash received each half year may, with propriety and accuracy, be credited to Interest Revenue. But, if the investor buys $1,000,000 5 per cent bonds at 110 and another block of 1,000,000 5 per cent bonds at 90, the ease is different. To be sure, on the face the situation seems identical with that where $2,000,000 bonds are bought at par. In each case there is an initial outlay of $2,000,000, the same sum is collected each time coupons are cashed the repayment of principal is made at the same date in each case and in exactly the same amount. Investment, collections of coupons, and payment of the face of the bonds are identical in time and amount.