Knowledge that Transforms

Reviews the book "Executive Action," by Edmund P. Learned, David N. Ulrich and Donald R. Booz.

Reviews the book "Managerial Economics," by Joel Dean.

There has always been a great deal of dissention between accountants and management concerning charges to depreciation expense and the corresponding credits to the reserves for depreciation. A restriction on assets would seem to be for the purpose of financing replacement either directly or by earnings re-invested. Restriction is a little more descriptive and the term is not subject to so many connotations. The fact that restrictions for renewal apply to all assets implies that only one account would need to be maintained in the general ledger for this restriction, providing adequate subsidiary records were maintained. If a general price decline ensues, the balance or balances of such excess restriction accounts could be transferred to the surplus account at a time when surplus is likely to be embarrassingly low. The assets would no longer need to be restricted from ownership equity. For a going concern the problem of providing for fixed asset replacement would seem to be more important than establishing a valuation reserve for old assets.

Reviews the book "Developing Men for Controllership," by T.F. Bradshaw.

Reviews the book "Statistica Economica," by Giovanni Lasorsa.

Reviews the book "C.P.A. Law Review," by Joseph L.Frascona.

Reviews the book "Accounting Trends and Techniques in Published Corporate Annual Reports," 4th ed.

Reviews the book "Advanced Course in Federal Taxes, 1950."

This article discusses how statistical analysis can serve accountants. Statistical analysis is a highly valuable auxiliary to many professions at the present time. But only in very recent years has its great value as an auxiliary rather than as a profession of itself been particularly realized. It is timely, therefore, to consider whether accounting could generate more power by meshing gears with statistics. This question is made even more opportune by the problems which the rise in the general level of prices has thrust upon accountants. These problem, already urgent, are becoming critical with the resumption of the upsurge in prices and the strong prospect of its continuance. Probably the best place for accountants to start in statistical analysis would be with index numbers. They are constructed by ordinary arithmetical processes and are simple to apply. But what spotlights the importance of index numbers to accountants now is their usefulness for dealing with problems presented by the decline in the value of the dollar. It seems not too much to say that if a substantial proportion of accountants were conversant with index number construction and application, these problems would be more concrete and vivid to the accounting profession than they have been and there would be much more rapid progress in handling them.

This article focuses on the managerial emphasis in elementary accounting. Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof. Individuals interested in the accounts and financial statements of a business enterprise stress the creditors or prospective creditors, investors or prospective investors, credit agencies, governmental agencies, etc. Management is usually relegated to the end of the list. Very few texts stress the fact that the accountant's first duty is to management, and the results of his work play an important role in the decisions of management. Emphasis is placed on the fact that administrative accounting deals with those matters which are the basis of managerial decisions, business policies and administrative actions. It deals with the significant factors from which important constructive accomplishments are brought to a successful conclusion. The students completing such a course will not all become good managers or good administrators overnight or by means of one course. However, with a better administrative background even at a very elementary level perhaps we, the educators, will give the business world a better product.