This article presents a discussion of two possible approaches to problems that derive from the apparent gap between business and academic environments. Many firms have taken the initiative in this area, and their Faculty Residency Programs are worthy of much praise. Some faculties have made useful efforts to associate executives with campus programs. In summary, there is little doubt that interested firms can and should obtain benefits from a Faculty Residency Program, either directly through using the faculty member in specialized projects, or indirectly, through the active utilization of his objective attitude in the decision making process. If the faculty member is to gain from this relationship, certain conditions must similarly be present. It is axiomatic that the academician be compatible in philosophy with his executive superior. Similarly important is the need for a well-defined project coupled with a real freedom to explore all avenues for attacking problems. Given these features, the Faculty Residency Program should afford substantial benefits to all involved parties.

The general theory of tax allocation is deemed to be appropriate within a period to the income components as well as between periods in order to obtain fairness in financial statement presentation. The matching of income components and their applicable taxes is a basic process of income determination and should be important in current-cost statements as well as in historical-cost statements. Current-cost presentations have been brought into increasing prominence by the American Accounting Association's "A Statement of Basic Accounting Theory." One of the foremost recommendations of the statement was to present current-costs as supplementary information in an attempt to overcome the criticism of historical-cost information. In addition to studying the tax allocation within a period used on general price-level increases in "A Statement of Basic Accounting Theory," this paper will recommend an alternative approach as the best of several other possibilities to be considered, using figures from the American Accounting Association's illustrated statements.

This article focuses on the objective of corporate financial reporting and statistical information. Corporate financial and statistical information are communicated to interested users through a wide variety of mediums. However, the published corporate annual report is undoubtedly the most widely distributed comprehensive source of corporate financial data. Two comparatively recent documents suggest some important guidelines and considerations for the formation of a statement of objective for corporate accounting. The American Accounting Association's committee report on the entity concept. In short, the committee advocates a user-oriented approach in defining the entity. They feel this approach to defining the entity places the concept at the very foundation of accounting theory. While the entity concept standing alone may provide only limited guidance in solving such problems, it does provide the theoretical justification for a framework which should prove helpful in solving such problems.

The article seeks to state a few provocative thoughts that may result in some stimulating and, hopefully, instructive ideas on this important topic. Scholarly interest in what the American Accounting Association calls "basic accounting theory" and one's own needs as a part-time investment analyst have led the author to continuing consideration of the feasibility of getting current-cost information for financial reports. Many accountants view getting current costs as a difficult, non-objective task. The author's first thought on the subject, however, is that there really is no need for discussion: simply use current practices for determining "market" under the lower of cost or market rule. Seriously, perhaps the main reason for discussing the controversial topic of current costs is that in the decade of the Sixties has had some important authoritative statements supporting the essential ideas of many thinkers. The goal of objectivity is an important one, but it is far from being achieved. For example, when a client's new auditor follows another auditor, he does not really find depreciation, bad debts, amortization of development costs, factory overhead allocations, and the like to be objective determinations.

A sound knowledge of cost-volume-profit behavior and cost interrelationships is essential to many business decisions. Information which is easily understood but may not represent reality can lead to costly errors in judgment in business decisions. The management accountant certainly has a responsibility to provide management with something more than simply data. He has a responsibility to provide analyzed data, or useful information, for specific purposes. Yet he has a grave responsibility to avoid employing oversimplified techniques, or partial analysis, which may be misused or misunderstood by management. This article serves four purposes. First, to present the application and limitations of the Scatter Graph and Least Squares methods of studying the cost-volume-profit relationships of a company. Second, to present the possible weaknesses or limitations of Break-even Analysis and Profit Graphs. Third, to review some of the major statistical techniques of evaluating the significance of relationships. Fourth, to present the application of Multiple Regression Analysis, with the aid of a computer, to determine the cost-volume-profit relationship.

The article comments on a manuscript "The Accretion Concept of Income," by professor G. Edward Phillips. The Philips article demonstrates quite well that progress in accounting theory should begin with developing a single income concept, rather than a variety of income concepts, and that this single income concept should also aid various interested parties in making a variety of decisions. His point that simply because accountants must supply varied data for many different uses, does not imply a need for more than one concept of income is well taken. He says, agreement on a meaningful concept of income is essential to improvement of the financial reporting function of accountants, and there is no inherent reason for this concept to interfere with the collection, analysis and interpretation of data relevant to particular decisions. Philips does not ignore the price-level problem in his paper, but concludes that even a severe inflation or deflation would not necessitate eliminating unreal gains or losses from income statements. He also states that his suggested accretion concept eliminates the bunching effect of realizing periodic accretion gains all at one time, as is presently done.

It is becoming increasingly popular, in first-year accounting courses, to emphasize the use of accounting information for management purposes. To accomplish this in a first-year course it is necessary to eliminate or de-emphasize certain phases of accounting that traditionally have been considered an integral part of first-year accounting. There is not time to cover everything and include an introduction to managerial accounting. The new emphasis represents the first significant change in accounting since accounting became differentiated from bookkeeping. It is a healthy sign, and it means that first- year accounting will be a more dynamic and useful experience. An accountant needs to have a firm foundation in techniques as well as principles and therefore it is the duty of the teachers to provide them with basic education an accounting major requires. Deficiencies in accounting techniques can be overcome by assigning a practice set at the beginning of the study of intermediate accounting.

The article presents the application of the Monte Carlo method to inventory problems involving uncertainty of demand and or lead-time. A general statement defining the Monte Carlo technique would be that it is a process whereby data are generated by the use of some random number generator, such as a random number table. In essence, the Monte Carlo method consists of simulating the real world to determine some probabilistic property of a population of events by the use of random sampling applied to the various components of the events. All inventory situations have certain general characteristics, each involving some aspects of cost, service and usage. One characteristic is that as an inventory increases, the cost of storing those goods will also increase but the cost resulting from an inability to fill orders will decrease. Hence, one aspect of the inventory problem is to find an inventory level, which minimizes the sum of the expected holding and shortage costs. The objective of the article is to consider a set of decisions, which will minimize total cost and provide an acceptable level of goods to satisfy the anticipated or expected demand rate.

The article focuses on the definition of accounting. The author states that to the advanced accounting student or practicing accountant, the art of recording, classifying and summarizing business transactions conveys much more than simply the routine recording of business events in an accounting system, these activities would seem to be clearly in the realm of bookkeeping. Generally, an accounting system is designed to collect, classify and summarize business transactions, as well as business activities. An accounting system may be a manual system, a semi-mechanical system, or an electronic computer system. The study of the more recent developments in accounting systems, such as electronic systems, or computer systems, is especially interesting in regard to their potential in the area of analysis. Education for accounting must involve the study of all reasonable alternative systems, principles, standards and methods of measuring the effects of business activities. Accounting systems may be divided into two main types, financial accounting and administrative or managerial accounting.

The article discusses the revolution in the area of accounting which gives the beginners a firm foundation upon which to build a consistent, meaningful structure of accounting theory. Primarily, the "revolution" involves a willingness, whenever necessary, to modify the orthodox historical cost and realization "principles" of accounting. In addition to emphasizing the forward-looking aspects of accounting, a complete revolution will emphasize the importance of economic theory, historical accounting development, and a consistent theoretical construct. The utility of using the economists' forward-looking approach, when prices rise as well as when they fall, must be compared with the difficulties and possible errors of so-doing. Bases for a rational choice of methods, however, will have been developed. Choice will no longer have to be made solely on the basis of custom or reference to authority. The accountant, hopefully, will be prepared with an independent, analytical, approach to solving important accounting problems. A host of decisions, not just managerial decisions, may then be made by various groups in society, based on relevant data and sound, consistent accounting theory.