Accounting history, Double-entry Bookkeeping, Inca's

Accountants appear to have backed off a bit from the "forgetting of income" movement of the "dirty surplus era" and to be content merely with deferring the recognition of income. Postponement of the recognizing of income or profit is attainable by means of several techniques, which have been developed over the years and which have gained varying degrees of prominence in the literature of accounting. In this paper, the author proposes to examine some of these techniques and to explain a relationship among them. This examination requires the clarification of a few terms. Some accountants have described aptly the term-deferred income as a misnomer. Profit deferral or income deferral, however, are understood to mean the process of postponing or deferring the recognition in the accounts of some arithmetic difference between revenues and expenses. Thus, deferral of income does not mean a delay in the obtaining or acquiring of income such as is the case when an individual is unemployed or a business makes no sales. To some accountants, the concept of optimeasurement which results in income deferral and presumably tax avoidance currently conflicts with a possible desire of management to show in some periods higher profits than optimeasurement would provide.

The author believes that accounting justifications which are claimed to be theory differ from each other principally because of differences in individual attitudes or philosophies which, in turn, are an inseparable part of individual personalities. The process of attitude formation should be left to sociologists, psychologists and others. In the accounting fraternity, however, one might attempt to trace the effect of defined attitudes upon conceptual formulations. It is doubtful, for example, that a satisfactory explanation has been offered regarding exactly why straight line depreciation, first in first out, original cost for fixed assets, and even matching are so appealing. Some insight into the influence of attitudes upon accounting theory might be gained from a study of various "schools of economic thought." The influence of economic thought upon accounting theory may be stronger than one now realize. In accounting theory and practice, it has been discovered that accountants possessing presumably identical amounts of knowledge about a problem and comparable analytic skills still may differ on matters of reporting and of theory.

There is definite evidence in accounting periodicals of an increasing interest in the uses of statistics, especially statistical sampling techniques, in accounting. The proponents of the use of statistical techniques in accounting have presented their arguments so convincingly that many have accepted as a logical extension the idea that accounting and statistics should be merged or integrated. The courses offered as a result of such a merger are generally designed for presentation to students in the early stages of the business education. These courses seem to have as their objective the acquaintance of the student with accounting and statistical techniques so that he might apply these techniques in certain business situations. Probability, the normal curve, correlation and time-series analysis, and statistical forecasting are the statistical techniques usually included. As to having a separate statistics course for accounting students, there should not be much of a problem involved. Marketing people have their courses in marketing research, including a wealth of statistical applications. Economics departments have statistics courses for economists.

Reviews two books by Harold Bierman Jr. and Allian R. Drebin. "Financial Accounting: An Introduction"; "Managerial Accounting: An Introduction."

The article reviews the book "Administrative Control and Executive Action," second edition, by B. C. Lemke and James Don Edwards.