Knowledge that Transforms

Abstract During the past year, in 1958, the activities of the Association followed the customary pattern of completion of some projects carried over from earlier years and launching new projects and programs. An exact measurement of progress is neither possible nor necessary. Each year represents only a small segment of the continuing stream of influence on accounting education and research fostered by the Association. The periodical "The Accounting Review," continued to hold its high place in accounting literature and to grow in circulation and influence. The Association has continued its policy of cooperation and cordial relationships with other accounting organizations. Recognition of varying points of view was encouraged by the appointment of non-teaching members to various Association committees. A Committee on By-Laws was appointed during 1958 to consider the creation of the office of president-elect. The recommendations of the committee were approved by the Executive Committee and presented to the members at the annual business meeting for consideration. The establishment of a special fund for a doctoral fellowship program was announced at the annual convention in Syracuse.

Reviews the book "Budgeting and Cost Analysis for Hospital Management," by Leon E. Hay.

Abstract This article says that the equation A = L+P is often termed the basic of fundamental equation of accounting. There is no question as to the validity of this equation. There is, however, a question as to whether or not this equation should be termed the basic equation of accounting, implying that it fully describes the accounting and economic processes of the firm. A much more useful equation to describe the accounting process and accounting relationships can be readily developed wherein it is not necessary to qualify P by definition, implication, or otherwise. This dynamic equation can be extremely useful in teaching elementary accounting, for the instructor can explain much theory and some of the mechanics of accounting quite easily with the help of this equation. Another excellent use of the dynamic equation is in explaining the theory of closing the books. All too often this becomes a rather mechanical process for the student doesn't really understand what he is trying to accomplish. It can also be pointed out that the dynamic equation represents the general ledger because it includes all categories of accounts.

Abstract The article focuses on the guaranteed annual wage and accounting for decision making. In recent years, much attention in the U.S. has been centered on plans to cope with unstable incomes through the device of "guaranteed wages." On the one hand, the state governments have instituted plans of unemployment compensation, which might be referred to as a type of guaranteed wage. On the other hand, the guarantee of eight hours of pay if the employee is called in for a shift, regardless of the actual number of hours worked under eight hours, has also been referred to as a guaranteed wage. This article is limited to a discussion of the guaranteed annual wage and approximations to it included among the supplemental unemployment benefit plans. The term "guaranteed annual wage," involves two main ideas. First, it is a method of payment; the emphasis generally laid on the hourly rate is shifted to the annual rate of pay. Secondly, it implies the idea of a minimum wage, which is guaranteed to the employee by the firm.

Reviews the book "Accounting Systems in Modern Business," by Eldred A. Johnson.

Abstract Three movements among colleges and universities now threaten the lives of all lower-division courses in business administration. The first is the return to an undergraduate program dominated by the liberal arts courses; the second, complementing the first, is the postponement of all professional education until the upper-division or preferably the graduate years; the third is the elimination of all courses which are "pre-judged" as occupational and vocational in objective. Elementary accounting, the foundation course for practically all curricula in business administration, appears to be directly in the path of these three movements. If it is to survive the onslaught, it may have to undergo some drastic revisions. The author of this investigation examined rather closely the objectives of the elementary accounting course and compared these objectives with the needs of the students who take either one or both semesters of the course. The findings indicate that a large proportion of college students who enroll in the usual elementary course, especially those who take only the first semester course, would benefit more from a one-semester course in which emphasis is placed on the understanding of financial data and the fundamentals of corporate accounting.

Abstract Since the emergence of the tax allocation views of the Committee on Accounting Procedure of the American Institute of Certified Public Accountants and the lengthy and well-documented excoriation of the allocation proposition by the U.S. Securities and Exchange Commission (SEC) in Accounting Series Release No. 53, a good deal of attention in accounting literature has been given to the role of the corporate income tax provision in income determination. Despite the fact that tax allocation procedures have found a large measure of acceptance in practice and although the position of SEC has changed extensively, there remains considerable difference of opinion with respect to the basic nature of the tax deduction and how it should be viewed from the standpoint of income determination, statement presentation and disclosure, rate regulation, and financial analysis. Since the inception of corporate income taxes in the U.S., the legal view of the tax provision has frequently been a rather cursory one, and in practically every case the provision has been regarded in the nature of cost or expense.

Abstract The article presents the results of an examination, from the point of view of accounting technique, of the double-entry ledgers of six individuals and one partnership, ranging in time from 1665 to 1774. The records examined are not in any way a representative selection. It has confined largely to the scope of the accounts and to a group of related questions concerning balancing, profit calculation and the statement of asset values. These topics are perhaps the most interesting for practitioners of accounting, and concern matters which are relevant for the use of past account-books as source material by economic and business historians. Though almost every one of the individual practices and procedures in these ledgers is mentioned in one or other of the large number of contemporary treatises on accounting, the ledgers disclose a greater diversity than one would have expected from an examination of the treatises, which tends to produce a more clearly defined picture of a modal pattern. It is possible, of course, that the exanimation of further examples of surviving ledgers may reveal a similar modal pattern.

Reviews the book "Audit Practice Case," by Arthur W. Holmes and Francis E. Moore.

Abstract In making the decision to enter graduate training for business there are certain factors that you should consider. These are 1. The philosophy of education of the particular schools and your possible reaction to its training techniques. 2. The need for planning; a. To present the best transcript your talents will allow. b. To take the aptitude examination in your junior year, or certainly midway through your senior year. c. To secure letters of recommendation that will give an accurate portrayal of you. d. To visit the school of your choice so that first hand knowledge of the school is yours, as well as other things such as housing, scholarship and loans, and physical facilities. This sort of preparation will assure your application timely and considered attention and enhance the possibilities of admission.