Knowledge that Transforms

Reviews the book "Corporation Course."

Reviews the book "National Income Statistics of Various Countries, 1938-1948."

Abstract Sound budgeting, sound accounting and sound auditing are important for any governmental or institutional accounting. Governmental and institutional accounting deals with the principles and practices of accounting in connection with groups of people in society who are united in non-profit undertakings for the purpose of rendering services of particular kinds to their groups specifically and to society generally. The principal accounting problems of governments and institutions include accounting for revenues in accordance with restrictions placed thereon by legislative bodies, donors or governing boards, accounting for the appropriation, encumbrance and accrual of expenditure items in each of various funds. Many municipalities in the U.S., particularly the smaller ones, are finding it impractical to accrue revenue items and, hence, are accounting for revenues on a cash basis. Many problems relating to system installation, internal accounting control, external auditing, etc. have not been solved by governmental and institutional bodies in a manner acceptable to accountants generally.

Abstract The article focuses on the need to draw a distinction between cost accounting and book keeping. Bookkeeping is usually considered to be a purely clerical function, directed by the accountant and proceeding along lines laid down by the requirements of accounting. The most distinctive of the accounting activities relate to the presentation and interpretation of the results of bookkeeping for the benefit of management, owners, creditors, and the general public. Cost accounting, includes four major functions, which includes devising cost accounting systems and procedures, recording cost data, or cost bookkeeping, preparing forecasts of costs which serve as the basis of planning and budgeting, and presentation and interpretation of cost data, including the making of comparisons between cost data derived from one source and those derived from another such as comparisons between actual and expected costs. For the teacher, the distinction between cost bookkeeping and cost accounting is important principally as a basis for putting into their proper perspective the several matters which are dealt with in the cost accounting course or textbook.

Abstract In a private enterprise economy with profit as the primary rational motive for production the correct reporting of profit is as important as a free market economy itself. The difference between nominal wages and real wages and nominal income and real income is an adjustment for change in price level measured by some general index. But similar distinction between nominal and real profits has not been widely accepted. This article illustrates quantitatively a distinction between real and nominal profit and shows some of its economic implications. In accounting for business income persistent use of the legal dollar at all times to measure cost and revenue has led to many unfortunate comparisons. The amount of money paid is usually considered to constitute cost as well as to measure cost. Real cost is, the value of economic resources over which money paid gives command. It is the general purchasing power of money paid which constitutes economic real cost and not the legal money itself. With a change in purchasing power of the dollar historical real costs become distorted unless corrected by an index of change in the general purchasing power of the dollar.

Reviews the book "Shares of Upper Income Groups in Income and Savings," by Simon Kuznets.

Abstract This article focuses on the report on examination of records of American Accounting Association. In accordance with an arrangement made with your Secretary-Treasurer have examined the balance sheet of the American Accounting Association as of December 31, 1950, and the income statement and the net worth account of the general fund and of the membership fund for the fiscal year ended on that date. Accounting procedures of the organization has been reviewed, and without making a detailed audit of the transactions, it examined and tested the accounting records and other supporting evidence by methods and to the extent we deemed appropriate. Examination was made in accordance with generally accepted auditing standards applicable in the circumstances and included all procedures that we considered necessary. The receivables were not confirmed by direct correspondence. It has found that records have been kept very conservatively: Inventories of Association publications have not been set up on the books, but all costs have been consistently charged to operations in the year of printing. Fixed assets, also, have been charged to expense when acquired.

Abstract The author in this article argues that for those students who do major in accountancy, the intermediate course must provide a sound foundation for advanced work in systems, auditing, advanced problems, and theory. He analyses the usual approach to this course in order to consider whether any changes or modifications may be in order. It has been argued that in the development of any course, two general problems must be considered, the content and the level of attainment expected of students enrolled. In the intermediate course in accountancy these problems become especially serious because of the variety of conditions under which the course is offered. According to the author in a given class three different groups of students may be included, non-accounting majors, accounting majors who will find work in industrial accounting, and accounting majors who will take positions in public accounting. The proportion of non-accounting students will very likely be somewhat smaller. If accountancy is offered in the freshman year, students may take intermediate accounting in either the first or the second semester of their second year in college.

Reviews the book "Introduction to Investments," by John C. Clendenin.

Abstract The article presents a report on the American Accounting Association. It states that the large increase in membership among the non-teaching accountants, which took place a few years ago, has been maintained and a substantial number of new members have joined the association. The journal, The Accounting Review, under the editorship of Frank P. Smith, has continued to serve instructors, students and practitioners with a series of significant and helpful articles, book reviews, solutions to certified public accountant (CPA) examination problems, and news items of members of the association. The association has established closer relations with the Controllers Institute of America and with the Institute of Internal Auditors, which should lead to significant results during the coming year. The Membership Committee is the largest committee of the association. Each state and the District of Columbia, as well as Canada, has a member on this committee. Special attempts have been made to increase the number of teacher members, while welcoming the professional, governmental and industrial accountants who are interested in joining the association.