Knowledge that Transforms

Abstract The article analyzes the extent and types of coverage of cost accounting topics during the Uniform Certified Public Accountant Examination in the U.S. from 1956 to 1965. Although the cost content has fluctuated considerably from one examination to another, the significance of the composite time percentages of 25 percent of the practice and 15 percent of the theory examination devoted to cost denotes the importance of the area. The author concludes that shifts in emphasis are usually fairly gradual and the major topics suggested in this paper should offer guidelines for preparation in the immediate future and until other trends become noticeable.

Abstract The article presents various problems prepared by the Board of Examiners of the U.S. body American Institute of Certified Public Accountants and presented at the second half of the certified public accountant examination in accounting practice on November 4, 1965. The candidates were required to solve all problems. The suggested time allowances for various problems were also given. One of the problems talked about the budget expenditures of the Board of Education of the Victoria School District for the year ending June 30, 1967. Data given included that the estimated average daily school enrollment of the School District is 3,000 pupils including 200 pupils enrolled in a vocational training program, estimated revenues include equalizing grants-in-aid from the state of $150 per pupil and that the grants were established by state law under a plan intended to encourage raising the level of education. The students were asked to prepare a schedule computing the estimated total funds to be obtained from local taxation for the ensuing school year ending June 30, 1967 for the Victoria School District.

Abstract The article focuses on the trend of corporations funding extensively for research to improve upon their profit margins. It is estimated that business units in the U.S. are spending nine billion dollars annually on research activities. Firms in some industries such as pharmaceuticals, chemicals, and electronics depend upon research for their survival, and it is not uncommon to find companies in these fields spending more for research each year than their reported earnings. Since these expenditures have reached extreme proportions, the accounting treatment of research costs has become a vitally important factor in determining the income of the companies involved. It is concluded that the procedures currently used in accounting for research and development do not present a realistic picture of the economic consequences of this activity. They also are inconsistent with the principles which are generally applied to other areas of accounting. In addition, they provide management with an incentive for cutting back research expenditures although such curtailment might have a deleterious effect upon the long-range position of the company.

The article reviews the book "Quantitative Analysis for Business Decisions," by Harold Bierman Jr., Charles P. Bonini, Lawrence E. Fouraker and Robert K. Jaedicke.

Abstract Two basic postulates have been recommended: (1) Accounting information must be useful. (2) Fairness must govern the accumulation and presentation of accounting information. In addition, a third postulate has been suggested: (3) All applicable legal requirements must be met in the collection and presentation of accounting information. It is felt that these three concepts must of necessity underlie all accounting activity and theory and that they therefore qualify as postulates. Further, the broad, general nature of these concepts, rather than being an objection to their acceptance as postulates of accounting is in actuality a significant factor in favor of their acceptance in such a role. Postulates must be of broad implication by their very nature; these concepts so qualify. No attempt has been made here to refute the conclusions of ARS No. 1 in regard to the postulates recommended by that study. The recommendations of this paper should be considered in the light of that effort and other attempts to consider the subject of accounting postulates for those areas where the various approaches may be commingled.

Abstract Technological advancement characterized by the space age has brought in numerous changes in industries in the U.S. The era has witnessed rapid growth in development programs associated with space, missiles and electronics. Impact of these changes are somewhat limited to engineering and scientific programs, however, it should not be inferred that these factors have not affected the business environment of all industries. In the wake of these changes, questions related to the manner in which this emphasis on research and development has modified the environment of business firms, and implications of these changes for businessmen and accountants are of significant importance. The article focuses on some of these questions fueled by technological changes, and their impact on the realm of management, financial control and cost accounting. The analysis related to these questions relates primarily to advanced technology programs which are typical of the aerospace era. Using this approach, it is easier to appreciate fully the impact of these environmental changes.

Reviews the book "Petroleum Accounting Practices," by Stanley P. Porter.

Abstract The article highlights some attributes required for recruiting superior accounting students. It says that one of the principal problems in the recruitment of capable students to accounting is to identify the students who likely will succeed. Another problem is to inform students and others in an effective manner of the interesting and truthful story associated with opportunities in accounting. Still another problem is to identify and inform people who are influential with capable students, so that these people can counsel and assist their superior students in the selection of a career in accounting. If a person is to succeed in accounting, he must possess a high intellectual capacity. While he must also possess many other attributes, any widely broadcast type of recruitment effort should be directed primarily toward superior students. The efforts described here have been successfully used in recruiting accounting students at Oklahoma State University in Stillwater, Oklahoma. The article discusses various measures taken by the university to recruit accounting students.

Reviews the book "Standardkostenrechnung," second ed., by Karl Käper.