Knowledge that Transforms

Abstract Reviews the book "Precision and Design in Accountancy," by F. Sewell Bray.

Abstract Reviews the book "Operating Results of Department and Specialty Stores in 1947," by Malcolm P. McNair.

Abstract Reviews the book "Value of Commodity Output Since 1869," by William Howard Shaw.

Abstract Reviews the book "Cost Accounting," 3rd ed., by Charles Reitell and Gould L. Harris.

Abstract Air transportation has its peculiar economic problems which in turn have determined the industry's approach to cost accounting. The result of the economic and technical forces at work has been that the plane-mile method of accounting for costs is as antiquated as the pre-war plane flying on a plane-mile subsidy. Recognizing the new developments, the scheduled air carriers and the Civil Aeronautics Board developed a new system of account classification which was published as the Uniform System of Accounts for Air Carriers. This system went into effect as of January 1, 1947. At the same time the recurrent reports required by the Civil Aeronautics Board were completely overhauled, and financial reports were placed on a quarterly instead of a monthly basis. The application of any kind of real accounting for the cost of useful service performed will no doubt result in establishing the fact that nonstop flights are much less costly than flights with frequent stops, and that long-haul traffic is far more profitable than shorter haul.

Abstract Reviews the book "Business Organization and Management," revised ed., by Elmore Petersen and E. Grosvenor Plowman.

Abstract Reviews the book "Office Management: A Handbook," edited by Coleman L. Maze.

Abstract Financial accounting can be regarded as essentially a process of keeping historical records of financial stewardship. Since working capital is such an important matter, the records should be maintained and various statements prepared in a manner that will not obscure the movement of working capital funds. The calculation of periodic income is a secondary function. This viewpoint leads to what may be termed a source and application of funds concept or philosophy of financial accounting. It involves nothing essentially new except a shift of emphasis. Most of the current principles and practices can be regarded in this light. An unqualified adoption of this viewpoint suggests some modifications of current practice. Both the income statement and the balance sheet may be restated to emphasize the fund change, or fund flow, aspect of business undertakings. The source and application of funds statement itself gains in significance. The double entry bookkeeping process may be invested with a source-application meaning. Debits (apart from those made in the income summarizing process) can be interpreted as expressions of applications of funds, and credits (with the same qualification), as sources. It this is done, certain matters that are sometimes formally recorded would not be recognized in the accounts proper. The source-application of funds viewpoint narrows the gull between accounting for business organizations and for non-business undertakings, as well as for fiduciaries. Without adopting or accepting all of the possible variations of existing practice that have been suggested, the source and application of funds philosophy may be used as merely one measure or standard by which accounting principles and practices, existing and proposed, may be evaluated.

Abstract The article presents information about moneyflows in social accounting. The economy has suffered in the past from business depressions and unemployment and in spite of the present high level of business activity there is no reason to think depressions have been eliminated. If one looks beyond the immediate situation, unemployment is still the most important economic problem. Because one lives in a money economy where moneyflows play an important role in organizing economic activity, a better understanding of moneyflows should help one towards a better understanding of the problem of maintaining reasonably full employment. Moneyflows arise out of transactions. Because they arise out of transactions they are recorded in accounts to the extent that the transactors involved keep books. Because they arise out of transactions, too, over-all estimates of the money flows in the economy lend themselves to presentation in financial statement form. Such a form of presentation has the great advantage of organizing the component moneyflow estimates into a systematic picture, a picture that brings out a number of equalities between debit totals and credit totals. These equalities facilitate the process of making statistical estimates of moneyflows.