Knowledge that Transforms

Abstract Reviews the book "Excess Profits Tax Relief : The Cyclical Provisions," by Joseph L. Snider.

Abstract Reviews the book "War Profits Taxation and Special Wartime Reserves," by J. Keith Butters.

Abstract Reviews the book "New Firms and Free Enterprise: Pre-War and Post-War Aspects," by Alfred R. Oxenfeldt.

Abstract Reviews the book "Andrea Barbarigo, Merchant of Venice, 1418-1449," by Frederic C. Lane.

Abstract The author has intentionally digressed from the limited subject of this article to emphasize the importance of the kind of experience any one should have who expects to do successful work in the office of a public accountant, and the author believes that the same situation holds as a requirement for taking the examination. It seems to him; therefore, that the existing situation is such that practicing accountants should realize the importance of this matter, if they are to attract to the profession the best of the material available. Of course, the aptitude tests now being developed by a special committee may be of great value to accountants in the selection of personnel, and the great advances made by the colleges in accounting pedagogy will result in much good. Results show that the essential ingredient is not theory, or book learning, but practical experience, and it seems logical to state that, if this profession is to maintain and to increase its prestige among the professions, its present members must see to it that those whom they would attract to the profession are properly trained in the practical aspects.

Abstract Reviews the book "Term Lending to Business," by Neil H. Jacoby and Raymond J. Saulnier.

Abstract The article presents information on empirical cost study and economical theory. In recent years there has been a growing interest in measuring what is known as the cost function. While several economists have directed their attention to the actual calculations, a greater number are likely to become interested in some of the many problems which have been disclosed. The larger problems relate to certain significant implications of the conclusions arrived at in these studies. An analysis of the issues involved will perhaps contribute to their clarification. The empirical investigation of cost functions involves the measurement of the relationship between cost and output. It is thought that such studies may be significant because "cost behavior has a crucial role in determining the most profitable adjustment of the individual enterprise to its economic environment." In considering these efforts to calculate the cost function, it is necessary to recall some essential elements of economic theory. In economic theory a distinction is made between the short run and the long run.

Abstract Accounting and statistics are much alike. Both are methods for the collection, classification, summarization, and presentation of numerical data. Each has as its goal the presentation of information in such a way that the information is clear and usable. Neither seeks to direct any action. Rather the intention in both fields is to analyze and classify the information and to indicate interrelationships within the material clearly and completely so that one who studies the reported data can readily determine what action should properly be taken. Accounting and statistics do not recommend action; they are merely service mechanisms to provide information that can be useful in the making of decisions which do lead to action. Neither accounting nor statistics should distort facts or impart to them a subjective, individualistic meaning. Thus accounting and statistics are similar in function as well as in nature. Each is concerned with the collection and presentation of information for interested parties. This is more readily apparent if the application of statistics to business is compared with accounting.

Abstract Reviews the book "Price Making in a Democracy," by Edwin G. Nourse.

Abstract Fixed assets are, in a sense, deferred charges to operations. It is from this viewpoint that they should be valued on the balance sheet of a "going concern."Recently there has been a change in emphasis on the part of accountants from the balance sheet to the income statement. In line with this change of emphasis, fixed assets should be given balance-sheet values in line with their efficiency as producing agents. The efficiency of each fixed asset has to be determined by its comparison with other available assets that could be utilized to perform the same service. The sacrifice of depreciation and interest having been made at the outset, an asset value is set up on the balance sheet. It is thus evident that the balance sheet amount is the present value of future periodic charges on account of depreciation and interest. If it is desired that the periodic charges for depreciation and interest total the same for each period, the compound interest or annuity method of computing depreciation and interest should be used.