Knowledge that Transforms

The article discusses current problems of tax administration and procedures in the U.S. The article suggests certain ways to bring awareness in these taxpayers. These include advice to taxpayers as to the effect of proposed transactions, advice and assistance to taxpayers in the recording of the business facts upon which tax liability is predicated, advice and assistance to taxpayers in the preparation and filing of returns, conferences with revenue agents in connection with the examination of returns, filing of claims for refund, filing letters of protest, attendance at hearings and the submission of evidence, conduct of appeals to the United States Board of Tax Appeals, including the filing of a petition, the preparation of evidence, the trial of the issues, the preparation and filing of briefs, and such motion practice as may be necessary, suits in the District Courts and Court of Claims and appeals to Circuit Court of Appeals and Supreme Court. While knowledge of the tax law and the regulations issued there under is essential throughout, however, in the earlier stages the matter is largely one of facts and therefore a matter of accounting, while in its final stages the matter becomes entirely one of law.

Reviews the book "Stabilized Accounting," by Henry W. Sweeney.

The university course in elementary accounting taught at the undergraduate level should serve two general purposes: first, to serve as a survey course to the general field of business-to acquaint the student with business terms and practices-to teach a thorough understanding of the theory of accounts-to indicate in as many ways as possible the use which may be made of accounting data in interpreting past results and present conditions and in making changes in policies and procedures to improve results in the future; second, to teach certain techniques of record keeping which will prove useful to the student if the occasion arises when he should find it necessary to keep records of some kind-to instill habits of accuracy, neatness, timeliness, system and order. The balance-sheet form, classifications and understanding of all common terms thereof will also be a part of this first teaching unit. A study of actual balance sheets, published by our larger corporations, will indicate how general practice complies with and is contrary to accepted practice. The ordinary and more common balance sheet ratios and their significance should be introduced at this point. With the completion of this unit of the work by the end of the first half of the first semester, or later, the student will have a vast fund of knowledge of business management, business terms and business organization.

Reviews the book "Introduction to Federal Taxation," by George T. Altman.

Reviews the book "Law and Labor Relations. A Study of the Industrial Disputes Investigation Act of Canada," by B.M. Selekman.

The article focuses on defining the concept of goodwill. Initially goodwill was defined as nothing more than the probability of old customers returning to the old place. In one instance, goodwill has been defined as an intangible property which, in the nature of things, can have no existence apart from a business of some sort that has been established and carried on at a particular place. Goodwill is the favor which the management of a business wins from the public and the probability that all customers will continue their patronage. It is the general public patronage and encouragement which a business receives from its customers on account of its local position; that is the subject of value and price and of bargain and sale, though intangible. In this definition, the patronage concept is dominant, although its dependence upon location is still mentioned. In general, it may be stated that the emphasis upon the local aspect of goodwill has declined gradually, although there has been considerable overlapping of views in point of time.

Reviews the book "How to Evaluate Financial Statements," by Alexander Wall.

Reviews the book "C.P.A. Law Questions and Answers," by John C. Teevan.

The article presents the author's comments on having a professional college for accountancy. The author says that the profession throughout the U.S. has not yet made an adequate test of the existing programs of accounting instruction or a thorough trial of graduates of colleges of commerce with an accounting major. Too often in taking commerce graduates into the staff, little or no attention is paid to scholarship records as a clue to aptitude and the ability to lean. Occasionally personality and college activities are allowed to out-weigh the evidence of a thorough foundation in collateral subjects. Practitioners could provide an immediate and powerful stimulus to better educational preparation for accountancy if they would pledge themselves for a period of years to absorb the scholastic upper fifty per cent of the accountancy graduates of the colleges of commerce having a satisfactory accounting program. The article further asserts that the profession is hardly ready for separate schools of accountancy with a high degree of specialization because the literature and teaching materials are still inadequate to support a three-year program in accountancy alone. Thus, either collateral or related subject matter, such as economics, finance, law, and business administration, should be added to the work in accountancy in desirable amounts.

In barter for re-trade, expected profit is a judgment regarding relative subsequent exchangeability of the new thing possessed in comparison with other, as yet, un-possessed desirable things. The test of this pre-judgment comes when the anticipated re-exchange is accomplished. If, subsequent to the first barter-exchange, no third person finds a prospective utility in the goods held for re-exchange, there is no second exchange and no accomplished profit for the trader; also if after a second barter exchange, the goods then newly received should prove not to have the expected utility, there can be no accomplished profit. Valuation is a part of the process of exercising sound judgment in consuming or trading, and forms the basis for all production and merchandising operations. And the ability to make sound judgments regarding consumptive wants and uses, and of trade opportunities exists quite independently of records as such. Reality of profit should not he read into a situation too soon or upon inadequate evidence. This is the basis of the so-called realization principle. When an objective test has verified a personal hope, conviction of reality may safely follow but not before. Anticipated profits are mere opinions and therefore subject to individual bias and mistaken judgment. Realized profits on the other hand have met an objective test, under conditions by which the utility of the goods has been further attested by the independent judgment of a subsequent receiver in exchange. But even such realization may prove to be an incomplete test of reality because today's gains may be consumed by tomorrow's losses if the goods last received prove useless.