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ECONOMIC THEORY IN RELATION TO ACCOUNTING VALUATIONS.

W. A. Paton

The Accounting Review 1931 6(2), 89-96

The article discusses economic theory in relation to accounting valuations. All items which are included under the term assets may be very roughly divided, for the purpose in hand, into two groups, more or less accurately designated as follows, repositories for funds and summations of costs. In the first may be placed cash in its various forms, account, notes, bonds and other claims for money and securities or rights readily realizable in money if not representing sums to be collected at specified times. In the second group are organization and development charges, land and wasting assets, structures and equipment of all types, long and short-term prepayments and various classes of inventories. As in most classifications there are many doubtful cases, one division shades into the other. Finished goods produced under contract, for example, are from the standpoint of both economic and legal character very closely allied to ordinary receivables. As a rule the valuation of items in the first group is a relatively simple matter, depending primarily upon legal conditions, simple arithmetical calculations and judgments as to good faith and responsibility of debtors. Further, in this group of cases there is ordinarily little to be gained by attempting to apply interpretations and reasoning of economics.

1931 Tax Diary and Manual (Book).

James V. Toner

The Accounting Review 1931 6(1), 77-77

Reviews the book "1931 Tax Diary and Manual."

ACCOUNTING AND THE COURTS.

L. L. Briggs

The Accounting Review 1931 6(3), 184-191

Owing to the comparative youth of the accounting profession, court decisions affecting its members are few and scattering. However, the importance of these adjudications to the profession in inverse proportion to their number. An attempt is made in this article to state the significant parts of the American and English cases which have been decided during the past half century. Since accounting has attained the dignity of a profession, its members are subject to the same rules in their practice as are the members of other skilled professions. The damages claimed on account of the losses from the defalcations of the clerk and the insolvency of his surety are too remote to recovered, without showing the existence of special circumstances, known to defendants from which they ought to have known that much losses were likely to result from failure to disclose the true condition of affairs. Such losses are neither the natural nor the proximate consequences of the failure of defendants to make a proper audit.