Knowledge that Transforms

Reviews the book "America Weighs Her Gold," by John Henry Rogers.

Reviews the book "Corporation Finance," by Arthur S. Dewing.

Abstract The word dividend usually refers to a distribution of corporate profits to stockholders in the form of cash. However, corporations may find it convenient or necessary to distribute their earnings in the form of property among their shareholders, and, when stockholders are few and the corporate property is readily divisible without decreasing its value there may be little, if any, objection to this method of distribution. In order to meet this need of modern business, various forms of property distributions, in addition to cash, stock, and scrip dividends, have been recognized and approved by the courts. The general rule is that when a corporation has accumulated sufficient property other than cash to justify a division among its stockholders, the directors, at their discretion, may pay dividends in specific property, if there is no statute or charter to the contrary. A corporation may make a property dividend of its own stock which has been purchased with surplus assets. A dividend of a company's own bonds is legal if it does not impair the capital stock of the concern.

Reviews the book "The Banking Structure of the Seventh Federal Reserve District. Bulletin No. 88."

Reviews the book "Real Estate Valuation," by Frederick M. Babcock.

Abstract The popular concept of budgets and budgetary control is probably based upon governmental budgets rather than upon budgets of industrial enterprises. This conception of budgets is reflected in the definition of a governmental budget as "a statement of probable revenue and expenditure and of financial proposals for the ensuing year as presented to and passed upon by a legislative body." The most important distinction between such a budget and the budget of an industrial enterprise is the emphasis upon rigidity and inflexibility which is inherent in the budgets of governmental units but which is entirely foreign to everyday business needs. Inflexibility is necessary in the case of Federal, state, and local governments since these units must be able to set up certain definite limits upon expenditures at the beginning of a fiscal period which will continue to be in effect throughout the period. In the case of General Motors Corp., budgetary control comprehends long-term and short-term planning, and includes, among other things, the current control of commercial expenses, manufacturing expenses, central office expenses, inventories and capital expenditures. These items must be at all times kept in harmony with the current rate of operations, and it has been found that flexibility in the basic budgets is a paramount need in securing such current control.

Abstract The National Committee on Standard Reports for Institutions of Higher Education consists of a group of college and university business officers and other persons engaged in educational administration, representing all sizes and types of collegiate institutions in the U.S. It has been at work for the past two years. Its purpose is to formulate principles which should be followed in the accounting and financial reporting of colleges and universities and secure the general recognition and adoption of those principles. Its work is carried on through support from the General Education Board, of which Trevor Arnett is president, and with the cooperation of the U. S. Office of Education and many other educational organizations. A preliminary survey by the Committee, the results of which were published in an early bulletin, emphasized the well-known fact that tremendous dissimilarity exists in the published reports of institutions of higher education and that the financial statistics of higher education are sadly inaccurate and incomplete. It further revealed the fact that in spite of much good work done in many places, institutional accounting systems often are incomplete and inadequate. The need of more generally recognized standards was evident. It is to rectify these conditions, and to endeavor to work out a basis of accounting and reporting which will be widely applicable and produce desired results of completeness and service, that the Committee has set itself.

Reviews the book "The Ethics of a Profession," by A. F. Richardson.

Abstract The subject of industrial accounting may be treated from any one of three points of view. First, it may be regarded primarily as a method of making and presenting an organized record of business happenings. Secondly, it may be regarded primarily as a method of exercising control over business events; during the period from 1918 to 1925 emphasis was concentrated largely on the "budgetary" aspects of industrial accounting. Finally, it may be regarded primarily as a means of measuring the efficiency of business operations. The subject of this paper is the coordination of the "budgetary" and "standard cost" aspects of industrial accounting. The budgetary idea in industrial accounting was probably borrowed from the municipal field. Municipal expenditures are controlled under the basic rule that no moneys are to be spent except as a statutory authorization or appropriation is made in advance. These appropriations are made after a study of possible revenues; a summary of the estimates and appropriations is designated as the budget. Adopted at the beginning of the fiscal period, the budget is used to control expenditures throughout that period. At the conclusion of the period a report is made showing a comparison of the expected results with actual income and expenditures. As applied to the industrial enterprise the central objective of budgetary procedure is the exercise of control over manufacturing operations.

Reviews the book "Die Notleidende Unternehmung. 1. Band. Krankheitserscheinungen und Krankheitsursachen," by Fritz Fleege-Althoff.