Knowledge that Transforms

Reviews the book "Preparatory Business Mathematics," by Lloyd L. Smail.

The article focuses on the selection and educational training of cost accountants. Each year thousands of young men and women are graduated by the secondary schools and take their places in the financial and industrial world. In recent years a test has been developed that indicates with little degree of doubt whether an individual's interest lies in the things which are important for a given profession or business. This test, called the Strong Test, has been extensively used in recent years. The Scholastic Aptitude Test used for college entrance is composed of two parts, the mathematical and the verbal. The mathematical test measures accuracy speed, and the ordinary use of figures. The verbal test measures the general information of the student and his ability to deal with facts. The selection and training of men for the accounting profession resolves itself into three areas, the modernization of the selection process, the broadening of the training, and the procurement of qualified instructors.

Reviews the book "Introduction to Business," by Raymond E. Gloss and Harold E. Baker.

Reviews the book "The Fund Theory of Accounting and its Implications for Financial Reports," by William J. Vatter.

Reviews the book "Annual Reports to Stockholders," by N. Loyall McLaren.

The teaching of accounting represents one of the most formidable challenges to the adapting of visual aids to teaching situations. This is true because of the very nature of accounting. Accounting requires some abstract thinking, especially in advanced courses. Abstractions are very difficult to visualize. Accounting requires the study of detailed forms and statements, and, until recently, projection devices have not been of adequate power to project these necessary details. This explains in part the slight use of visual aids in accounting instruction. Another explanation is that accounting instructors are not aware of the possibilities of visual aids and arc not trained in their use. However, since tests show that an individual learns primarily through his sense of sight, it seems that efforts should be made to use visual aids in teaching accounting in spite of the difficulties encountered. Some of the visual aids are, The blackboard, motion pictures, lantern slides, filmstrips, charts plant visits, and others. Visual aids are only an aid or supplement to the instructor. They cannot replace a text or instructor or outside study on the part of the Student. The use of visual aids will not lessen the work of the instructor. The instructor will work more, but he will work more effectively. If properly used they will result in more thorough coverage of the material presented.

The article presents information on the statistical data on depreciation bases. As a result of the drastic rise in construction costs in the past few years and the expectation of a continuation of a high level of prices, it is not surprising that there is considerable discussion today on the problem of the basis to be used for the depreciation of plant assets. This article is devoted instead to the presentation of a series of data showing in a statistical manner the precise nature of the problem. To limit the problem, only depreciation of building cost is considered. The data included herein are taken from the records of a number of residence halls for men and women students at the University of Michigan. The depreciation expense per student per year varies widely that a noticeable effect on comparative operating results of the several halls will be obtained from accruing depreciation on a cost basis. Especially is this the case when it is remembered that revenue rates, salary and wage rates, and food prices, the three major items in a residence hall operating statement, are essentially the same for all halls.

Reviews the book "Cost Accounting," by Clarence L. Van Sickle.

The article presents information on the pricing of exports under the foreign assistance act of 1948. The ultimate objective underlying the plans for the re-establishment of economic stability in Europe, South America, and China will be lost if the U.S., in the course of making these great efforts, fails to maintain the essentials of a sound economy for itself. Strained and stressed as the economy already is from the transitions from wartime status to peacetime operation, two major factors now enter the picture, each one of which by itself can have a profound and decisive effect upon the course of economy. People are concerned here with that aspect of the problem of maintaining a sound economy which is affected by pricing policies, and in particular with the effect of certain cost concepts on pricing policies. Lest it be thought that this aspect is anything but a segment of the problem of maintaining a sound economy, it must be said that the answer lies in other directions for many phases of the problem. For example, where the productive capacity not only is insufficient to handle these new burdens but was proved to be insufficient to handle the needs of the last war.

From the outset the U.S. Securities and Exchange Commission has been sympathetic to this point of view and has sought the advice of leading accounting authorities in teaching, public practice, and among executives of corporations investment bankers, and financial analysts in the preparation of rules, regulations, and forms necessary in the administration of the acts which authorize the Commission to prescribe the forms, items, and details of financial statements to be filed generally, uniform systems of accounts, principles to be followed by registered investment companies in maintaining their accounting records and in preparing financial statements. On individual problems, however, where experience has disclosed serious discrepancies in practice as between companies and accountants and one has felt that uniformity in procedure would benefit investors by rule or regulation of the Commission or in an opinion of the chief accountant. It is imperative, therefore, that the Commission make certain that the financial statements contained in registration statements be completely unequivocal and are not used as a proving ground for innovational presentations.