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CLASSIFICATION AND TERMINOLOGY OF INDIVIDUAL BALANCE-SHEET ITEMS.

E. I. Fjeld
The Accounting Review 1936 11(4), 330-345
Abstract The article focuses on the classification of individual items in the balance sheet and the relevant terminology's used. The study reported in this article is based on the analysis of 587 balance sheets contained in the annual reports to stockholders of all the industrial companies having common or preferred stocks listed in the New York stock exchange. Some of the terms being discussed are—inventories, tangible fixed assets, intangible fixed assets, etc. In 390 out of 570 statements having inventories, no classification of content of inventories was shown. A single amount was being used for all the inventories. All the tangible fixed assets were combined in one amount in 323 statements. In the remaining balance sheets, where the tangible fixed assets were broken down into two or more items, there were 131 instances where the values of land and buildings were combined, making a total of 454 statements in which the value of the land was included with other values. This represents 78.5% of the balance sheets in which land was mentioned as one of the assets.

IN DEFENSE OF THE ACCOUNTANT.

Arthur C. Kelley
The Accounting Review 1936 11(1), 63-65
Abstract Economists often take the accountants to task for loose thinking, failure to define their terms, not comprehending the nature of income, and in general for being concerned primarily with procedure instead of with the development of a consistent philosophy of accounting. No doubt much of this criticism is justified and there is much need of a more careful use of words and more precise definitions of accounting terms in the writings of accountants. The fact is that many of the writings of economists disclose such a theoretical and academic type of mind, that their ideas are of very little help to the accountant in solving the problems which face him in his daily practice. A school of economic thought has arisen which has developed and elaborated the idea that the work of the accountant is essentially that of valuation, and the balance sheet is in essence a statement showing the present worth's of the expected future services which the assets will yield. The balance sheet is thus a forecast and is not an objective statement of facts. The accountant becomes a forecaster and prepares statements of opinion about what will happen in the future. This idea is surely far removed from the realities of the accountant's daily work.