Knowledge that Transforms

Reviews the book "Accounting," by Leo A. Schmidt.

Reviews the book "Employment Opportunities for Women in Professional Accounting."

Reviews the book "Elements of Business Mathematics for Colleges," by Llewellyn R. Synder.

Abstract The industrial revolution with its division of labor, its competition, and its profit motive demanded forms of measurement which could not be found in the conventional single-entry or simple double-entry bookkeeping system. Stockholders, workers, and management demanded reports of operations and financial information on a current basis which had not been available before then. Governmental accounting has a great many basic concepts found in industrial accounting, although some of the major principles are completely different. In industrial accounting the measurement of profits is the deciding factor for a great many of the basic principles. Matching of costs and revenues probably is considered the fundamental concept of industrial accounting. No such concept exists in governmental accounting. Usually, revenues and expenditures do not have a direct accounting relationship in governmental administration. Most governmental units have a great many operational activities. One set of combined records is not sufficient to analyze these activities. Governmental fund accounting for each of these various operational activities has no counterpart in industrial accounting.

Abstract For some years there has been a growing recognition by both educators and the profession of accountancy that one of the major problems in accountancy education is the difficulty of keeping the teaching staff abreast of the practical problems in the field. Generally, practical experience is one of the requirements before a permanent teaching appointment is secured. Of necessity this experience can be only for a few years and needs to be reviewed from time to time. In addition, many universities have had the experience of sending out promising young men to secure needed practical experience with the expectation that they would return to their teaching assignment. Almost without fail this expectation has not materialized, because by the time the young man has received adequate experience his value to the profession is such that the university is unable to compensate him sufficiently to secure his return to the classroom. The American Institute of Accountants has recognized this need in education and has begun to set up faculty residences or internships so that faculty men, in very limited numbers, may secure six months to a year's valuable experience in the offices of a public accounting firm. This is a fine step in the right direction but, it is believed, will operate very slowly and will not meet the needs of education fast enough.

Reviews the book "Industry-College Relations," by Edward Hodnett.

Abstract The article presents a report on examination of accounts for the year 1955 addressed to the executive committee of the American Accounting Association. It states that the financial position of the association had been examined in accordance with generally accepted auditing standards which included tests of the accounting records and other auditing procedures considered necessary. Exhibit A of the article presents the statement of financial position as related to assets, liabilities and net worth against general funds. Exhibit B, presents the statement of income against general fund as related to income, expenses and net income of the association during the year 1955. The statement of income against life membership fund in relation to income, expense and net loss of the association has been represented in Exhibit C, while an analysis of changes in net worth and net income of the association against general fund has been illustrated in Exhibit D. The article also provides notes to the financial statements, stating that, the negative cash amount in the life membership fund is not a bank overdraft among others.

Reviews the book "The Golden Book of Management: An Historical Record of Seventy Pioneers," edited by Lyndall Urwick.

Abstract Accounting Association is bound to be considered as having the weight of authority of the American Accounting Association behind it. The traditional balance sheet and income statement, employing historical dollar costs, have proved their usefulness and are of primary importance for many purposes. Reports prepared to reflect fluctuations in the value of the dollar may prove to have substantial usefulness for other purposes. The conceptual soundness of any special purpose report can be judged only by knowing fairly precisely what those special purposes are behind the recommendation for adjusted financial statements seems to lie the argument of Henry Sweeney that to add and subtract dollars in financial statements which have different purchasing powers commits a mathematical blunder particularly significant in periods when price levels have changed substantially. Upon close examination it appears that the claims typically made, that accountants do something about the effects of inflation, actually demonstrate that changing price levels breed a whole new and virulent set of stresses and strains in the economy. The urgent exhortation to do something would more appropriately be directed towards economic statesmen rather than accountants. Presumably the stresses and strains imposed by changing price levels would be with us even in a world completely acclimated to financial statements adjusted for those price level changes.

Reviews the book "The Accounting Process," by Edward J. Kelly.