Knowledge that Transforms

Abstract This paper has presented an integrated entity theory of accounting. Every entity for which an accounting can be rendered is in reality a social organization. A n accounting cannot be rendered for any other form of entity. An individual as a proprietor of a business is a member of a business organization for which an accounting can be rendered. This same individual may hold the position of father in a familial organization for which an accounting can be rendered. His church, the corporation in which he holds stock, the school his children attend, etc., can also be subjected to an accounting. From the organization structure (norms, roles, positions) of various kinds of organizations comes interaction, and one dimension of interaction is activity. The activity dimension includes exchanges which are measured in money. The writer submits that these few social elements are the essence and foundation of the social science of accounting.

Reviews the book "Fundamental Accounting Principles," by William W. Pyle and John Arch White.

Reviews the book "Extensions of the Boundaries of Accounting Theory," by Thomas R. Prince.

Abstract In late 1962, the U.S. Senate Antitrust and Monopoly subcommittee announced its intention of examining the antitrust implications of intracompany pricing. The issue was raised by the Senate Small Business Committee, which charged that pricing agreements between two units of a large corporation are immune to the anti-trust laws while an identical agreement between two small business firms is forbidden. The decision to price goods transferred internally between operating divisions of a company may appear to be one that should be determined by organizational and accounting considerations alone. The fact is, however, that there are legal implications that must be taken into account. The use of intracompany pricing and the method employed may be cited by the Government in the event that anti-trust proceedings are carried out against the corporation. The method used may also raise questions as to the company's compliance with state unfair practices acts. For those companies which have foreign subsidiaries, intracompany pricing may raise problems under foreign customs and tariff laws.

Abstract The article presents problems that were prepared by the Board of Examiners of the American Institute of Certified Public Accountants. The candidates were required to solve problem one through four and either five or six. It informs that the answers should be selected in accordance with the Internal Revenue Code and Regulations effective for fiscal years ending in 1963. Some of the topics covered by questions are: partnership, taxable income, stock, sick pay and others.

Abstract This article is presented as supplement and partial amendment to Accounting and Reporting Standards for Corporate Financial Statements-1957 Revision. The Committee has limited its consideration to accounting for land, buildings, and equipment; it has not given specific attention to other long-lived assets. However, recommendations regarding long-lived assets must be based on premises which are applicable to financial accounting as a whole. If the underlying premises are sound, the recommendations should be applicable to other related areas as well. The Committee concurs with the point of view expressed in the 1957 Revision that "the use by investors of published financial statements in making investment decisions and in exercising control over management should be considered of primary importance." Specific consideration has not been given to information requirements of other groups, such as various government agencies. Specifically, the purpose of financial Statement is to assist the investor in making his own qualitative judgments about a firm.

Abstract Two accounting research seminars were instituted as formal courses by the Indiana University Graduate School of Business, Bloomington, in the first semester 1963-64, after several years of informal experimentation. One seminar is for doctoral candidates, the other for masters degree candidates. The two differ in objectives and approach. The objectives of the doctoral candidates seminar in accounting research have been mentioned. First, to prepare each candidate to proceed with the research and writing of his doctoral dissertation promptly upon the completion of his course work. Second, to help doctoral candidates to become aware of needed research in accounting, and to stimulate them to do research whether or not academic credit or pay is involved. The objectives of the seminar for masters degree candidates is to motivate such candidates to continue professional education after completing their formal education. It aims to broaden the knowledge of the candidates of current and nascent developments. It also aims to help candidates improve their ability to understand what is involved in doing accounting research and in communicating the results of the research.

Abstract The article focuses on the need for engineering influence upon accounting procedure. Economy studies are universally acknowledged an essential part of engineering. Because of the large number of decisions made at the research, development and design levels, economy studies performed by engineers are collectively of great moment to corporate and national prosperity. It should be obvious that the accuracy of an engineering economy study can be no better than that of the data on which it is based. An improvement of the basic data is sometimes urgently needed; it can be accomplished at justifiable expense, but will require a mutual effort to build and maintain an adequate two-way avenue of communications between accountants and engineers. Accountants are currently striving to make one set of accounts serve two incompatible purposes that is, to provide records acceptable to officialdom and to provide sound business data on which to base everyday business decisions at the grass-root level. The latter aim is often neglected, unless the scope of the accounting profession is expanded into two parallel sets of accounts.

Reviews the book "Operating Results of Department and Specialty Stores in 1961," by Malcolm P. McNair.

Reviews the book "Wealth, Income, and Intangibles," by J.E. Sands.