Knowledge that Transforms

Abstract Reviews the book "Principal and Governmental Accounting," by Carl H. Chatters and Irving Tenner.

Abstract The article presents an overview of problems prepared by the Board of Examiners of the American Institute of Accounting. The problems were presented as the second half of the C.P.A. examination in accounting practice in November 1947. The candidates were allowed four and a half hours to solve both of the problems. Each problem was given a weight of 25 points. Some of the problems were to prepare information from a statement of the company's loan account with X Bank for the two months of September and October 1947, a statement showing quantities of purchased-chased materials covered by trust receipts at October 31, 1947 and a statement showing the quantity of the company's product in inventory at October 31, 1947. In the second problem, data was given and the students had to prepare, an account sales for September, 1947, as rendered by each of the three consignees, columnar work sheet showing corrections to the accounts of the Winston Company, as of September 30, 1947, and a condensed income statement of the Winston Company for the year ended September 30, 1947.

Abstract Reviews the book "Cost Accounting," by John J.W. Neuner.

Abstract Against the extensive background of history it is of great interest to note the comparatively recent origins of two phenomena which people regard as outstanding characteristics of Western Civilization. The author refer to the establishment of responsible parliamentary government since the last quarter of the Seventeenth Century, less than three hundred years ago, and to the development of the industrial system of economy since the last quarter of the Eighteenth Century, less than two hundred years ago. The author is certain that accounting, even though elementary in method, served useful purposes in the governmental and economic undertakings through all the millenniums encompassed by the identifiable civilizations. However, an art or science cannot become a social force until the economic and governmental conditions permit an independent professional development which may then use its talent in making a contribution to the public welfare. These favorable conditions for the field of accounting did not arise until after the establishment of responsible representative government and an industrialized economy. As industrialization progressed business enterprises attained much wider scope and transactions became more and more complex. Under these conditions the proprietors found it necessary to divide duties among personnel in accord with the logical phases of the activities and to base judgment to a greater and greater extent upon facts and interpretations furnished by the accounting process.

Abstract Reviews the book "Money and Banking," by Raymond P. Kent.

Abstract The phase of inventory reserves consideration should be given to the application of inventory reserves to two other areas namely, the valuation reserves, and reserves for replacement of inventories involuntarily liquidated applicable to inventories priced on the basis of last-in, first-out. Valuation reserves are provided to cover the adjustment of inventory pricing to the lower of cost or market, adjustments that be necessitated by physical deterioration, obsolescence, or price change. Generally, however, the use of such reserves for pricing purposes is not widespread in as much as valuation adjustments. Inventory reserves are provided for estimated future losses, losses measured not in their entirety by strict adherence to a rigidly fixed base price of the past but by objectively applying the experience of the past with reasoned judgment as to the future. It is better objectively to approach such a situation through the means of an inventory reserve than to be compelled to follow either a technical "fifo" or "lifo" form in the face of a compelling conviction that something else is right.

Abstract As a result of a recent discussion between members of the Executive Committee of the American Accounting Association and the Chairman of the Education Committee of the Institute of Internal Auditors in the United States, the editor to this department was asked to conduct a limited survey in order to determine the present status of the course in internal auditing. The Institute of Internal Auditors has been active in the field of education for several years, and its several committees wish to cooperate in every way possible to further tile adequate preparation of students for careers in internal auditing. Some case and text materials have already been prepared, these teaching aids are rapidly being augmented as more universities become interested in the subject matter. In carrying out the survey 36 questionnaires were sent to specific persons in the same number of selected institutions. Most of the prominent schools of commerce and business administration were included in the group and thirty replies were received.

Abstract The article presents problems which were prepared by the Board of Examiners of the American Institute of Accountants and were presented as the first half of the C.P.A. examination in accounting practice in May, 1948. The candidates were allowed four and a half hours to solve both problems. Each problem was given a weight of 25 points. The question was on the Hear Telephone Company, which operated two departments - "Communications" and "Manufacturing." The "Manufacturing" division kept a complete set of accounts, which were controlled by the general ledger of the "Communications" division. As of November 30, 1947, the Hear Telephone Company sold to the Wan Manufacturing Company the current and plant assets, except cash, of the Manufacturing division, the purchaser assuming all of the department's liabilities to outsiders. On the date of sale the Watt Manufacturing Company issued to the hear Telephone Company, in full payment of the purchase price, 5,000 shares of common stock. In addition to that, the article provides all the required information on which the questions are based.

Abstract Reviews the book "Business Finance and Banking," by Neil H. Jacoby and R.J. Saulnier.

Abstract Reviews the book "Internal Control Standards and Related Auditing Procedures," by Walter H. Kamp and James A. Cashin.