Knowledge that Transforms

At the very heart of a process cost accounting system lies the cost of production report. The report itself contains the details of departmental total and unit costs and the disposition of these costs by transfer to a subsequent department or finished stock and by accumulation of uncompleted work in process at the end of the period. It becomes the basis for the periodic summary entries which measure the flow of product costs through the plant. While the actual preparation of this report does not appear to pose too many problems, the accumulation of the data necessary for its preparation has been a difficult one for many students. The development of definite steps for this purpose might be of considerable benefit to the student, and it is the purpose of this paper to present and illustrate such a procedure. Seven logical cumulative steps has been prepared for each producing department independently in this article. The author hopes that this will be of great help for students preparing such a report.

In the near future students enrolled in elementary accounting may be taught either in classes composed of a large number of students which may be staffed by professional and experienced teachers or in small classes conducted by graduate students or part-time teachers. The number of accounting teachers is not increasing at the same rate as the increase in the number of students enrolled in accounting classes. Schools which either do not have graduate programs which attract graduate students competent to teach elementary accounting or do not have an adequate number of professors may need to use large sections. Large sections of elementary accounting may help solve budget problems in hiring and retaining competent teachers. A school may be able to pay excellent salaries to a staff of limited size by using large classes for only a few sections of elementary accounting. Another reason for using large classes is to enable persuasive and dynamic teachers to recruit able students to major in accounting and study in the college of business. Still another reason for large classes is to aid in teacher and faculty development.

In July, 1962, all companies working on research and development contracts for the U.S. Department of Defense or the U.S. National Aeronautics and Space Administration were advised by those agencies that they would be expected, in the future to employ (PERT) in planning and controlling their contract work. Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM) are in wide use in the chemical and construction industries today and successful applications have been reported in many other fields as well. In essence, PERT permits the combination of the systems concept and the computer into a control technique which shows the way to the optimum allocation of resources. The use of PERT permits the development of more realistic and more detailed time and cost estimates against which actual progress can be measured. Perhaps the principal benefit denying from the routine application of PERT is more accurate projection of resource requirements through the systematization of planning. There has been a growth in the application of PERT technique in the industrial nations.

Reviews the book "Intermediate Accounting," 3rd ed., by Arnold W. Johnson and Oscar M. Kriegman.

It is true, of course, that accountants have been concerned with the problem area of fixed assets for a long time. Yet, many significant questions are unresolved. This article suggests a new look and solution to certain of these problems. This is done by extending fundamental ideas of financial accounting to areas now ignored. The suggested extension of accounting reflects the managerial function of planning and controlling plant and equipment assets. It does this by developing the essential characteristics and the unique contribution to the firm of plant and equipment assets over their lives. It is important for the reader to realize that the suggestion is not a plea for external reporting of capital budgets as they now exist. Instead, the impact of this idea has a bearing on conventional accounting practices. The general role of managers and financial accounting relative to fixed assets will be reviewed initially in this article. The overall management activity of planning and control will be expressed in terms of an asset's life cycle as outlined below.

The article presents a report on teaching methods and programmed instructions in the U.S. During the past few years, in the process of continuing search to discover means for increasing instructional efficiency and for developing new materials to cope with the rapidly expanding demands for additional education and training by a burgeoning number of learners, the experimentation and development of programed learning has received the attention of educators and training directors across the country. Programed instruction has found wide-spread usage in industry and in the armed forces in various aspects of training for specific assignments or tasks, in which predetermined performance levels or behavioral patterns had been established. In numerous situations in both education and industry, programed instruction has proved to be effective, and under some circumstances more so than conventional methods. However, at this time research findings, especially at the college level, are totally inadequate to serve as a basis for making decisions on the adoption of programed learning for use throughout any specific course or program.

Reviews the book "A Survey of Accounting Ideas--With on Approach Based On 'Claims To Services'," by G. D. Roy.

Although studies have been made investigating the history and development of cost accounting, little attention has been given to the question of the understanding or acceptance of the subject by courts of law. This paper, therefore, summarizes its author's research in attempting to learn what has been the attitude of justice in the U.S., as gleaned from judicial opinions in court decisions, toward the concepts, principles and practices of cost accounting. The study has been limited largely to manufacturing costs, as much work has been done in other fields. Since volumes, for instance, have been written on costs and values in public utility rate-making, that area is not considered here. The definition and delineation of costs in military procurement cost-plus-fixed-fee contracts is not only determined by government regulations, but a satisfactory investigation into such costs has been made. The many court decisions involving the Robinson-Patman Act will only occasionally be referred to herein, as most of them are not truly pertinent to this research.

The article presents information on the report of the Committee on Courses and curricula-General of American Accounting Association. The Committee's task, briefly, was to develop a comprehensive body of liberal arts and general business knowledge to include in an accounting major's college curriculum. The Committee believes that the development of a professional accountant should be viewed as an amalgam of formal and informal education in which college education plays only one important part. The prime objective of the accounting major's college education is not to train him for a specific job or even to train him for his chosen career, but rather to create a capacity within him for gradual development in the years which lie ahead as he faces the challenges of his profession. Thus, the development of abilities to reason, to communicate, to organize and act when confronted by various business situations become important considerations in structuring knowledge for an accounting curriculum. The conclusions reached in this report are obviously of a subjective nature rather than being based on empirical evidence. They may be colored by personal opinions and biases. Yet, these conclusions have run the gauntlet of approval by an eight-man committee constituted, as the reader may see, of a wide variety of experiences and interests.

The article informs that there are certain basic over-all concepts regarding the fundamental nature of business and other organizations from which one reasons to arrive at some accounting decisions, including aspects of classification, measurement and reporting. These concepts are variously termed theories, schools of thought, view- points, conventions, approaches, methods of viewing, and even doctrines. They are so different from one another that they lead to different conclusions or accounting decisions. This often results in controversy and sometimes confusion and misunderstanding. Two of the concepts are widely held-the proprietary and the entity concepts. Other concepts or theories have been proposed as being improvements upon or more realistic than the two mentioned. These include the fund theory, the enterprise theory and the residual equity theory. This paper is divided into two parts. Definitions and a somewhat general discussion of the concepts were found to be necessary and are taken up in Part I. The areas of conflict arising out of the existence of the differing concepts are disclosed in Part II. Readers who tend to be impatient with theoretical discussions may wish to turn to Part II first to see if the disclosures are of interest to them.