Knowledge that Transforms

The article presents information about managing public accounts, including accounts of various governments and of public institutions, and the discussion of problems relating to those accounts. It has often been assumed that the procedure commonly followed in keeping the accounts of private business can be applied without material modification to public accounts, which has led to the commission of many errors of principle. To understand fully the requirements of Public accounts, it is necessary to understand and take cognizance of the peculiar qualities in the organization of public business. Ownership in a public corporation is tested in the body politic or in those persons appointed or elected to constitute a corporate board or commission for the management of a public institution or political subdivision, who, however, sent as representatives at the electorate and not in their own right. The general purpose of a public corporation is to render service to the public at cost. Limitation of management, especially as to finances, appears at every point of business procedure.

Reviews the book "Municipal Finance," by A.E. Buck.

Reviews the book "Survey Course in Accounting," by Wesley James McCarty and L. Cleveland Amidon.

This article focuses on a provision of preferred stocks on a balance sheet. Preferred stock may have other rights and features. Examples are the redemption right, protection through maintenance of minimum net current assets or minimum ratio of current assets to current liabilities, protection through a sinking fund. The purpose of a balance sheet is to show the correct financial condition of a business as of a given date, stock preferences should be expressed in as much detail as is essential to fulfill this purpose. Further, as preferred stock is shown as a part of net worth, the problem of expressing preference's narrows down to a discussion of the net worth section of the balance sheet. Net worth, in its simplest form, consists of one kind of stock and surplus.

Reviews the book "Principles of Accounting," by Paul L. Morrison and Eric L. Kohler.

The article discusses the aim and method of accounting instruction in the State University of Iowa. The university has a two-year college of commerce, and, accordingly, the majority of the students are university juniors and seniors. First-year accounting work is offered, however, to pre-commerce sophomores who are technically students in the College of Liberal Arts. This work is entirely under the control of the College of Commerce and is placed in the sophomore year primarily to enable the student to secure some business background before coming in contact with commerce work proper. In other words university believes that a knowledge accounting principles is a desirable factor in the background which will enable the commerce student to make the most out of his two years in the College of Commerce. This course is prescribed for all commerce students. There is a "raison d'etre" for first-year work in accounting. University's experience has convinced it that the student's contact with the principles course in accounting furnishes him with a knowledge of business terms, procedures, and results which will aid him materially in mastering such counts as corporation finance, money and banking, industrial management etc.

Professional speaker Dean Marshall made a notable contribution to business literature in the "Journal of Political Economy" for June, 1926, entitled "The Collegiate School of Business at Erehwon." In a somewhat allegorical form Dean Marshall traces the development of collegiate business education in the United States during the last ten years. He is correct in his statement that nowhere is found exactly such courses as he proposes. But the general trend of collegiate commercial education has followed his plan. His conclusions are evolutionary rather than revolutionary. The evolution of business education is stated in the following words: "The organization of material is now being modified, not because it was a failure, it was a distinct success, but because conditions seem to justify taking the next step. For one thing, in the last decade there has been a great increase in the amount of factual economic material available for use in the high schools and there will certainly be a still greater increase in the future. This seems to justify looking forward to a somewhat more mature and generalized presentation of our economic organization at the junior college level. For another thing, the materials of Instruction which Erehwon has developed in the various subdivisions of this field can now rather readily be arranged so as to give in a single course a more organic presentation of economic organization than was possible in the half-dozen somewhat specialized courses."

Reviews two books related to accounting. "Accounting for the Petroleum Industry," by David F. Moeland and Raymond W. Mckee; "Bituminous Coal Mine Accounting," by W. B. Reed.

This article presents developments related to accounting departments and teachers in universities in the U.S. Charles Leveson, a former Instructor at University of California at Los Angeles, California, has recently paned the California C. P. A. examination and will receive his C. P. A. certificate when he has satisfied the experience requirements. Howard S. Noble, chairman of the accounting department of the same university, is leaving the department in February to spend the balance of the academic year in London, England in study of cost accounting and the public accounting profession in England. The enrolment in the second-year course in advanced accounting has shown a one hundred per cent increase this year. Paul P. Cooper, who has been an assistant in the School of Commerce and Administration in University of Chicago for the past two years, has been placed in charge of the accounting work in the extension department of the University of Pittsburgh. W. F. Graham, formerly professor of economics at Knox College and also teaching assistant at Chicago, has been appointed instructor in accounting.

Accounting and statistics, are similar in their uses, for both are used as tools of control. They are also similar in their method, bearing, so to speak, a family resemblance, for accounting and statistics may be regarded as offspring of the single parent, quantitative method of analysis. The quantitative method of analysis has been very successful in the natural sciences, because most natural phenomena can be easily segregated and measured. This method has been the basis of many of the important scientific discoveries of recent years. In fact, it has been asserted that progress in the natural sciences has always waited upon the development of adequate quantitative technique. In the social sciences also it has been maintained that adequate control can only be obtained from better quantitative treatment of the phenomena. It is, of course, often difficult to measure economic phenomena accurately, nevertheless the measurement is necessary. The business enterprise organized for private profit has accordingly developed a technique of measuring and recording it. Facts, and business policies are now formed primarily on the basis of the quantitative data available in accounting and statistical report.