Knowledge that Transforms

Reviews the book "Expenses and Profits of Limited Price Variety Chains in 1938," by Stanley F. Teele.

Reviews the book "Principles of Accounting," 4th ed., by R.B. Kester.

Reviews the book "C.P.A. Review," by Louis Marder.

Abstract At some time or another the question "how do I get a job with a decent accounting firm?" has more or less tortured the minds of many young accountants. In the past, and even today, obtaining information on this subject has been an exceedingly difficult task. Although many articles on the duties and problems of the junior accountant have been written, most, if not all, lacked some important element of truth. They necessarily were compiled either from the limited experiences of the writers themselves or from the experiences of a small number of junior accountants. The "real" information was lacking, for no large accounting office would reveal any of its innermost secrets. However a good deal of this information has now been made available. The employment policies of a number of representative accounting firms have been described in the recent testimony in the McKesson and Robbins Case' in which twelve outstanding accountants gave expert testimony on many aspects of accounting. Accountants and their policies of hiring and training junior accountants in the country may be divided into two major groups: a) Those who accept the idea prevalent in Great Britain that accountants should be brought up through the apprenticeship system, and b) Those who choose their staff by retaining college graduates with the proper academic background in accountancy and allied subjects, and who give their staff subsequent training.

Reviews the book "Auditing Principles and Procedure," by Arthur W.Holmes.

Abstract The article focuses on the progress made in the U.S. governmental accounting and the future prospects related to the subject. The Federal government's accounting for general funds has reached a standstill because the Comptroller-General's office has been more interested in rejecting minor expenditures than in setting up a modern and complete accounting plan for the entire Federal establishment. Local governments have improved their general accounting, budgetary accounting, and utility accounting and have just begun to enter the field of cost accounting. The rapid development of governmental accounting awaited the establishment of recognized standards. Standards, principles, and recognized procedures have now been developed on a much broader scale through the work of the National Committee on Municipal Accounting, the Municipal Finance Officers' Association, the American Institute of Accountants, the American Accounting Association, and other allied groups. At present the general accounting procedure of the Federal government is utterly inadequate to present factual information about assets and liabilities. Governmental accounting has reached its best development in cities over 10,000 population. The counties have been much slower to adopt improved procedures because county finance officials are usually elective; because the county government lacks coordination; and because the term of office of county officials is shorter than the term of city officials.

Abstract This article focuses on various educational and ethical issue in accounting education and training. This article is concerned only with the education of qualified accountants, public and private, rather than the technical training of bookkeepers, clerks, and other routine workers due to the belief that the training of these routine workers is an important problem, but one entirely separate from that of the broad education of an accountant. Based on opinions of various accountancy firms of New York State, it is suggested that the accountant should be college educated and trained. Supposedly the widest variation in this belief would occur with respect to the relative emphasis that should be placed on cultural education, broad business training and technical accounting training. The author reports that many public-accounting firms give preference to graduates from a four-year cultural course over graduates from business and accounting courses which are deficient in cultural training. He suggests that the accounting courses proper should emphasize fundamental principles and theory, and managerial uses of accounting information, rather than bookkeeping procedure, routines and technique.

Abstract The Robinson-Patman Act is an amendment to the Clayton Anti-Trust Law. The primary purpose of this amendment is to do away with price differentials as between competing customers to the extent that they were not warranted by economic considerations. The law grew out of the fact that certain groups having great buying power, such as leading chains and mail-order houses, seemed to have buying advantages that were not possessed by the multitude of their smaller competitors: advantages which appeared to be out of proportion to the actual economies growing out of trading in the larger quantities of merchandise. The act has two main parts, the civil and the criminal. Violation of this provision of the law subjects the violator to punishment by the Federal Government with fines or imprisonment, or both, inflicted in case of conviction. Cost accountants as such are primarily interested in the first part of the act which involves the granting of quantity discounts and the proper justification thereof. It is obvious that transactions in order to become subject to the provisions of the act must have certain features. There must be a group of transactions in which there is a price discrimination as between different customers. They must be transactions in interstate commerce.

Abstract In the past, charges have been leveled at the annuity method of estimating depreciation, some so serious as to have completely removed it from both formal and practical consideration. These contentions will be discussed in this paper, and in this process will be elucidated what is believed to be a more general annuity method than that ordinarily used. The criticisms with which this paper will be concerned are: 1) imputed interest on the fixed output asset is included in the cost of production; 2) each year's stream of revenues is assumed to be the same; 3) an arbitrary rate is used; 4) difficulty of application is too great. The belief regarding imputed interest arises from the contention that not only is the cost of the asset written off, but also interest on the asset. Because a rate is applied to the asset to show its growth during an accounting period as it approaches one period closer to its stream of net revenues, the suspicion is immediately amused that this must be interest. In order that the validity of this contention can be examined, investigation must first be made as to what rate is pertinent to the annuity method.

Abstract In this article, the author focuses on the adequacy and reliability of corporate accounting reports provided to stockholders and security analysts. He tries to point out the gap in the regulation of accounting reports under Securities Exchange Act, based on around seventy selected corporate balance sheets and income statements for 1937. He also discusses a number of limitations inherent in the accounting material made available to investors. Accountants and investment analysts today are agreed that the income statement is much more significant and informative to the investor than the balance sheet. It reports that the Act applies to corporations with securities listed on national securities exchanges and requires such corporations to file with the Commission and with the exchange annual reports which comply with the standards imposed by the Commission and the exchange. The article undertakes to break additional ground in the inevitably forthcoming critical analysis of accounting categories and accounting concepts.