Abstract ABSTRACT: While current management accounting texts are in general agreement regarding the usefulness and general calculation methods for sales variance determination, they do not consider the effects of alternative product reporting classifications on the analysis. For sales variances, different product aggregations basically change the character of the analysis. For example, whereas a detailed analysis might show each product having a positive price change, an aggregated analysis could show a negative price change. The objective of this article is to indicate such possible effects and to make recommendations to avoid difficulties. Alternative analyses from a single data set are developed to illustrate the potential problems. Conclusions are that aggregated products should have margins as homogeneous as possible and that great care must be exercised in reports to indicate the level to which any mix variance applies.

Income smoothing, Chemical industry, Real smoothing, Artificial smoothing

Abstract Reviews the book "Cost and Managerial Accounting," by Jack Gray and Don Ricketts.

Reviews the book "Introduction to Modern Accounting," by Norton M. Bedford.

Reviews the book "The Computer in Auditing: The Use of Test Data," by Gerald Wohl and Michael D'Angelico.

Abstract The "Comment and Extension" of R. Picur and J. McKeown (hereafter, P and M) examines three aspects of "Alternative Income Concepts and Relative Performance Evaluations" (hereafter, KMT). The differences with P and M per their respective classifications is noted with respect to theoretical, methodological and statistical terms. The statistical extension of P and M, in particular, is completely invalid. The form of current value reporting used in KMT was shown to have theoretical support both in academia and in the profession. It does not agree with the proposal of P and M. However, the purpose was not at all to advocate a specific current value form, but to consider whether a typical current value form would indicate a performance difference among firms in an industry as compared to a typical historical cost form. The P and M proposed adjustment of liabilities to reflect changing market rates clearly would change the performance measures of the sample of KMT. However, there is no general agreement that liabilities should be so adjusted in current value financial statements, any more than there is general agreement that annuity depreciation should be used for historical cost reports.

Abstract This article presents response of the author on comments made by scholar Shu Liao on the paper "An Intra-Industry Comparison of Alternative Income Concepts and Relative Performance Evaluations" that was published in the October 1974 of the periodical "The Accounting Review." Liao examines the research methodology in three sections--statistical methods, components of income, and test of impact. First, however, it is pointed out that some of his statements might be interpreted to be full quotes of the study when, in fact, they are not. For example, in the second sentence of his note, he states the authors have concluded that each income concept could be used as a surrogate for other concepts. The statement is that, in many instances, each income concept could be used as a surrogate for the other concepts. The degree of agreement among different income concepts as a result of statistical tests is shown in each cell. He has made valuable suggestions for a number of extensions and for different approaches to studying the practical impact of alternative income concepts.

Abstract This article presents an intra-industry comparison of alternative income concepts and relative performance evaluations. While the amount of research on basic income concepts continues to be voluminous, questions of practical impact only recently have begun to receive much attention. In order to contain the research to a manageable size, a single industry, real estate investment trust (REIT), was selected for investigation. Also, only one of the three basic forms of real estate investment trusts, the equity real estate investment trust, was selected. There are several reasons for choosing this particular industry and type of trust. REITs are a homogeneous grouping of companies with a relatively limited history. Thus, for these companies it was expected that financial data would be available from the first year of operations to the current period. Such data are desirable in order to adjust properly for price-level changes. Since REITs are a homogeneous group, the application and selection of specific price-level adjustments are not as difficult as with less homogeneous companies.

Abstract Reviews the book "Inflation Accounting," by Shinkichi Minemura.