Knowledge that Transforms

Abstract The article presents information on the contractor's organization for terminations. The past several months have seemed to me very much as the pre-invasion months must have seemed to some of the officers and men charged with the responsibility of preparing for the Allied invasion of France. The constant planning and the uncertainty of the exact date when we would be called upon to test our plans have created a feeling of tension quite unlike anything the author has ever experienced before. In great measure, our success in handling contract terminations will depend upon how well we have laid our plans and what we have learned from the little experience afforded us so far. From the observations that most of us have made, it must appear inevitable that the capitulation of Germany will result in drastic cutbacks and cancellations. It will do little good for us to yell and howl that our contracts should not have been canceled. We entered into these contracts. They specifically provided for termination at the convenience of the government- not at our convenience.

Abstract Colleges and universities are attempting to serve the public by providing the type of education necessary to supply well-trained citizens who will fill a proper place in the society. In their accounting work, it is their desire to carry on a program, which will serve the profession. The author is surprised and perplexed at the antagonistic tone of occasional articles by both practitioners and educators. Mutual understanding is desirable. The profession looks to the educational institutions for the stock from which most of the future professional accountants will come. The educational institutions are training people for accounting careers and look to the public accountants for employment for many of their graduates. Thus the practitioner and the educator have mutual interests. Close cooperation should be beneficial to both. In the postwar period no one should lose sight of the fact that educational institutions want to serve the profession in providing adequate preparation for an accounting career; teachers are anxious to work with men in the profession in solving mutual problems which will arise; and men of experience.

Abstract The following problems were presented as the first half of the November, 1944 certified public accountant examination in accounting practice prepared by the Board of Examiners of the American Institute of Accountants. Candidates were required to solve problem 1 and either problem 2 or problem 3 in four and a half hours. The weights assigned were: problem 1, 25 points: problem 2 or problem 3, 25 points. A suggested time schedule was given as seventy-five minutes for problem 1, seventy-three minutes for problem 2, seventy-five minutes for problem 3. The first problem is concerned with the preparation of the year end accounts for the Acme company. The second problem presents details of account balances from the books of the City of Mariwood on June 30, 1943, the close of the fiscal year. The problem is concerned with the preparation of trial balances, supplying the needed account titles and preparing the closing entries. Problem three is concerned with the preparation of balance sheet for another business organization.

Abstract Reviews the book "Sound Policies for Bank Management," by Robert G. Rodkey.

Abstract The accounting legislative year beginning January 1, 1945, may mark a turning point from whence the licensed profession can say, "In this year the wise choice was made between principle and expediency," or, on the other hand, it may see the enactment of legislation that confers a form of state license to practice on large groups of individuals who have not been willing or able to meet the requirements for the recognized and established certificate. In exchange for this widened licensing the profession would receive a shadowy kind of questionable protection against so-called unlimited practice, in the form of some sort of restrictive legislation. The agitation for two-class legislation is not new; some fourteen states have such laws now, and every year its proponents renew the struggle for its enactment in other states. In these circumstances an analysis of the benefits alleged to flow from such legislation is warranted. And perhaps, just as warranted is an examination of the dangers to be encountered and the injuries likely to be sustained by the profession, as the result of such enactment.

Abstract Accounting standards should be orderly, systematic, and coherent; they should be in harmony with observable, objective conditions, they should be impersonal and impartial. Accountants know that laws cannot be ignored, but this does not necessarily imply that legal requirements must be given precedence in the formation of accounting standards. It is the purpose of this article to present two cases involving corporate capital stock transactions in which certain legal aspects of the transactions are considered. These cases will be discussed with a view toward establishing the extent to which legal factors are to be given precedence in their accounting presentation. Both cases concern the accounting for original issues of capital stock. Case one, however, relates to the time of issuance, whereas case two refers to the recording and reporting of the consideration received. The formidable task of developing accounting standards is being accomplished by the accounting profession to the vigorous accompaniment of criticism both within and without the profession. The extent to which legal requirements must be considered is one of the loudest instruments in this accompaniment.

Abstract Reviews the book "Wage Determination Under Trade Unions," by John T. Dunlop.

Abstract The article presents information on the development of aptitude tests for accountants. The conviction prevails among certified public accountants that their profession stands on the threshold of great opportunity. To cross that threshold, to take advantage of the opportunity, they foresee that they will need strength and versatility. A profession can be no stronger than its personnel. The accountants in public practice frankly recognize that in order to keep pace with the demands which seem certain to be made upon the profession the coming generation of accountants will have to be better than the present one. These considerations have intensified the interest of practicing accountants in the question of how to get the best available men for their staffs and train them as rapidly as possible to assume positions of leadership. This heightened interest has been given formal expression in a project in selection of personnel, launched by the American Institute of Accountants in January 1944, which may profoundly affect the future of the profession.

Abstract The article presents information on the new role of accounting instructor. Educators are becoming increasingly aware of the importance of campus activities outside the formal class room as an integral part of collegiate education. These activities, most commonly termed "extra-curricular," are extra only in the sense that as yet few colleges, if any, require participation in them to obtain a degree. Many institutions, however, utilize the voluntary services of faculty advisers for student clubs and organizations. A number, in addition, have centralized services in this area, in some instances to the extent of assigning personnel to and providing facilities for what may be called a student activities office. The function of the student activities office in general is to help develop a coordinated activity program best suited to the needs of the particular student body. Among the responsibilities which might be assigned to this office are: to assist students in the formation of new groups; to help plan club programs; to advise students on the management of student organization finances; to enlighten faculty advisers and to coordinate the work of the individual advisers.

Abstract The article presents information on employee stock options. It is common practice for many corporations, when negotiating an employment contract with an administrative officer, to grant the employee an option to purchase a designated number of shares in the corporation which employs him. Occasionally the option is exercisable immediately for the full number of shares agreed upon, but more often the contract provides that only a limited number of shares can be acquired each year or that the option can not be exercised until a given period of time has elapsed. Some option agreements have no limit upon their life but others lapse unless exercised by a specified date. The tendency is to make the option nontransferable, although even at this point no uniform pattern is discernible. Some options are assignable, while others are not. The option most favorable to the officer employee establishes an option price for the stock at a figure somewhat below the then existing market price. In this instance the option may have an immediate realizable value. This is particularly true if it is assignable or can be exercised immediately.