Knowledge that Transforms

Standard costs are the natural outgrowth and development of budgetary accounting, which, curiously enough, warn first used by industry in connection with factory burden. Gathering refinements along its path, the system has reached its present stage of development in connection with manufacturing after a complete circuit of functional application. That the subject is an important one is evidenced by the fact that considerable time has been devoted to it at each of the last five annual meetings of the National Association of Cost Accountants. That it presents many controversial features is likewise apparent from even a brief study of the limited available literature, and the ultimate solutions of these problems -as the thought and effort in the field progress-will doubtless differ considerably from many of the current practices. In the next decade, unquestionably, a great impetus will be given this subject by practicing cost accountants; and university instructors in this field must be prepared not only to discuss standard costs intelligently, not only to enlighten students as to the present development of the subject, but to lead the way to scientific and practical perfection of this method of cost accounting.

The article presents recent developments in departments related to accounting and economics in several universities and colleges across the U.S. James P. Adams has been promoted from associate professor to professor of economics at the Brown University, Providence, Rhode Island. Harry E. Miller and Hugh B. Killough have been advanced to associate professorship in economics. A.O. Greef of Harvard University, Cambridge, Massachusetts, has been appointed instructor in economics. At the University of California, Los Angeles, California, professor A.G. Coons is leaving the department to become professor of economics and executive secretary of Occidental College at Los Angeles. Floyd F. Bartchett of Buffalo University, Buffalo, New York, is coming to the department as assistant professor of economics to take charge of work in money and finance. At the University of Chicago, Illinois, Chicago, W.E. Dickerson is leaving to join the University of Kentucky, Lexington, Kentucky, as assistant professor of accounting.

Reviews the book "Outlines of Accounting," vol. 2, by William S. Krebs.

The position occupied by depreciation as a determinant of the profit or loss of an industrial concern is of equal importance to that of the inventory in the case of the mercantile firm, but while the public is awakening to the significance of correct inventory adjustments it appears still to embrace many delusions as to the nature and true significance of depreciation. The explanation of this lies possibly in the fact that depreciation, although a charge arising from the operation of tangible assets, has no reference to diminution of weight or volume and frequently no reference to any apparent physical deterioration. Confirmation of this view is to be found in the contrasting accuracy of the popular conception of depletion, for depletion is analogous to depreciation in all but one respect. Whatever its origin may be, this popular ignorance concerning depreciation is much to be regretted, for a balance sheet or any other accounting statement relative to an industrial concern is but half intelligible and may even be grossly misleading to any person incompetent to appreciate and criticize the policy of the directors with regard to depreciation.

This article presents information on various universities. The department of economics at Brown University is offering four graduate fellowships for the year 1927-1928. which are open to graduates of any college who have majored in economies or business administration. Professor J. P. Adams will offer a course in public utility regulation at the summer session of Northwestern University and will also be associated with the research activities of the Institute for Research in Land Economics and Public Utilities. A reorganization of the accounting courses is under way at Indiana University. Beginning accounting will be advanced to the sophomore year and will be put on the case basis. A chapter of the N. A. C. A. has just been established in Indianapolis with which the University hopes to cooperate. Under cooperative arrangements at the University of Minnesota, with a number of leading Twin City public accountants, ten seniors in the accounting course are being employed as junior accountants during the winter quarter.

Reviews the book "The Manual of Accounts and Budgetary Control for the Rubber Industry," by The Accounting Committee of the Rubber Association of America.

This article focuses on the author's views about knowledge of accounting which is needed by a businessmen. The author says that first, a business executive should be sufficiently familiar with the principles of accounting to enable him to appreciate the mutual relations of the important factors in his particular line. Another and all-important exercise of the accounting attitude of mind is needed by the executive in his analysis of the widely differing business conditions which often exist throughout the country. The most definite information on this score can be bad from the traveling salesman, who is usually the best posted man in such matters in his territory. The problem of the executive is then to concentrate his efforts on the section and localities where the going is good, and where business is to be had. On the other hand, he must cut on expenses in the localities where conditions are poor, scrutinize sales and credits and push collections.

Reviews the book "Manual of Municipal Accounting," by Lloyd Morey.

The Wharton School of Finance and Commerce is the under-graduate school of business of the University of Pennsylvania in Philadelphia. After forty-five years of experience and development, the ideal set for the school by its dean, Emory R. Johnson, and the faculty, is to offer courses of study which will give to each student: first, a reasonably general education; second, a special training in the principles of business; and, third, opportunity to specialize in the field of business in which he is most interested. Where does accounting instruction belong in this three-part division of the curriculum? Certainly not in the first division with subjects such as English, history, political science, economics, sociology, and other studies of general educational value. Incidentally, these general studies are not concentrated in the first two years, but are taken concurrently with the technical subjects throughout the four years. Two accounting courses come in the second division of the curriculum, which division includes subjects offering a training in the principles of business in general, a training which must be considered a minimum vocational equipment for any business man.

It is generally recognized that one of the leading factors contributing to the present high level of prosperity is the economy from large-scale production. The reduction of overhead and the lowering of unit costs due to the manufacture of commodities in large quantities has brought within reach of the average workman comfort. which were sheer luxuries a generation ago. This would scarcely have been possible under the sole-proprietorship and partnership forms of organization, as no small group of investors would have been able to furnish sufficient capital to finance the requisite volume of business. It has been the corporation, under the guidance of farsighted executives, which has contributed so largely to this progress. This change in the general aspect of business (with the scientific approach to problems of finance, production, and marketing which is now required) has placed business on the plane of a profession; and colleges and universities have recognized this by establishing departments of business administration with curricula designed to train men as leaders in this profession.