Knowledge that Transforms

Abstract Reviews the book "Office Management and Practices," by John J. W. Neuner and Benjamin R. Haynes.

Abstract It is interesting to speculate on the extent to which a too strict adherence by accountants to well-established, conventional forms and methods, may lead to the introduction of new and questionable practices by business men. Accounting principles do not change, but the problems of business do. Old forms and old methods of accounting which once satisfactorily reflected the truth and were correct applications of principles, may, because of a change in business practice resulting from economic shifts and other causes, no longer reflect, or make full disclosure of, the truth. There are times when the correct application of principles may be defeated by slavish adherence to a standardized form. Perhaps the reluctance of the accountant to adapt the profit and loss statement to the financial and managerial needs for truth in some businesses is partially responsible for the introduction of the "last-in-first-out" method of pricing materials into process and of pricing goods sold. It is not the inventories, but rather the material taken from raw material store, the material taken from process as goods are finished, or the material included in the product taken from the finished goods inventory and sold, or all three, that are priced by this method.

Abstract Reviews the book "Fundamentals of Accounting," by Perry Mason.

Abstract Reviews the book "Principles of Punch-Card Machine Operation," by Harry Pelle Hartkemeier.

Abstract Reviews the book "Proceedings of the Twenty-Third Annual Meeting of the American Association of Collegiate Schools of Business."

Abstract The article presents problems that were presented by the Board of Examiners of the American Institute of Accountants as the second half of the C.P.A. Examination in accounting theory and practice held on November 14, 1941.

Abstract The article discusses the relation between the balance sheet and the profit and loss statement. The income account is not more fundamental than the balance sheet. It cannot be so because balance sheet valuations are generally another aspect of income measurements. When researchers are concerned with the amount of Accounts Receivable, for example, they are concerned with the amount of revenue for a past period or periods. When they are interested in the valuation of machinery, they are also interested in the amount of depreciation. It may be that researchers have more use for the information provided by the profit and loss statement, but they cannot have faith in that information unless they believe in the balance sheet valuations. All enterprise accounting is, in one sense, profit and loss accounting, for researchers are always concerned with the distribution of receipts and disbursements through time. All enterprise accounting is therefore dynamic. The fact that we exhibit momentarily the amount of the leads and lags should not distract from the kinetic character of procedures. The balance sheet and the profit and loss statement are complementary; each completes the picture by presenting a different aspect of enterprise receipts and disbursements.

Abstract During 1940 the Curriculum Committee and the members of the Accounting Department of the Wharton School of Finance and Commerce, University of Pennsylvania, Philadelphia, Pennsylvania, made a study of the accounting curriculum to determine if it needed revision. As an aid in this study, two questionnaires were sent out, one to the Deans of the fifty-two other schools in the Association of Collegiate Schools of Business, and the other to 494 graduates in accounting. The answers received to these questionnaires were informative and helpful to the Committee and to the Department. With the thought that the data might be of interest to others this analysis and summary of the answers to the questions has been prepared. The replies of the graduates are considered first. As a result of the questionnaires sent to the graduates and to the schools, and the recommendations of the Accounting Department to the Curriculum Committee, the Faculty of the Wharton School of Finance and Commerce approved a new accounting curriculum. The new curriculum increases the semester credits offered in accounting from 31 to 39.

Abstract Reviews the book "Bank Audits and Examinations," by John I. Millet.

Abstract Those who teach beginning courses in accountancy know that students frequently have difficulty with simple arithmetical computations. Some of the instructors of students in beginning accountancy at the University of Illinois, Chicago, Illinois, believe this difficulty indicates that the average beginner in accountancy has an inadequate background in ordinary arithmetic, and further, that this lack of arithmetic has an important influence upon his ability to do satisfactory work in accountancy courses. In an attempt to determine whether these beliefs are warranted, an examination in arithmetic was given to all University of Illinois students registered in the first three elementary accountancy courses on the first and again on the last day of class of the first semester, 1939-40. The grades achieved by each student in each of these tests were tabulated and compared, where possible, with his accountancy course grade. The article presents the results of the arithmetic examinations and a comparison with course grades together with such explanatory material as seems necessary to assist in the understanding of the results and conclusions.