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STANDARDS: A DIALOGUE.

E. L. Kohler
The Accounting Review 1935 10(4), 370-379
The article focuses on standards for accounting. A good deal has been said recently about standards for accountants. The book Financial Reports for Colleges and Universities reflects probably the first attempt in the history of accounting to produce a coordinated, closely integrated textbook of standards, not withstanding the fact that it covers a specialized field. But what about the hundreds of uniform systems of accounts that have been produced since pioneering in railway accounting? That's a fair question. There have been many uniform systems of accounts put out by our public-service commissions, the I. C. C., and a pretty good number of trade associations. Most of them have dwelt extensively on account classifications and how and what to debit and credit. Most of them include provisions for some sort of financial statements. At this stage in the development of accounting, it would be difficult to frame definitions that everybody would agree to. It's the courageous effort to lay down a reasonable set of standards that is needed.

OBJECTIVE TESTS IN ELEMENTARY ACCOUNTING.

Geoffrey Carmichael
The Accounting Review 1935 10(1), 2-4
Members of the faculty of the accounting department at the University of Indiana, Indianapolis, Indiana has come to the conclusion that they want to be judged by the number of students who successfully pass the course rather than by the number who fail to pass. The elementary-accounting course is a four-semester-hour course, running through both semesters of the freshman year. The classes meet twice a week for one hour each time, and there are no laboratory or directed study periods between recitations. The freshman course is followed by a six-hour sophomore course, which is really quite a jump from the work of the first year. The sophomore work presupposes almost complete mastery of the fundamental principles of debit and credit, account and statement classification, and the common knowledge required for closing a set of books. By using the objective test it is possible to give more frequent tests and thus inform the student early in the course and repeatedly during the course of his achievement. The student is able to adjust himself to the course requirements without waiting until the mid-term or final examination when it is too late for adjustment.

PREPAID INTEREST.

G. E. Lukas
The Accounting Review 1935 10(3), 298-301
The article discusses consistency in accounting for prepaid expenses. It refers to an article by researcher Robert P. Hackett, published in the June 1934 issue of the journal The Accounting Review. The true foundation of the theory is in the idea that liabilities should be valued at their present value rather than their maturity value. The alleged inconsistency does not arise from the technique of accounting for prepaid expenses but from the technique of accounting for liabilities. Because interest-bearing instruments are recorded at present value and non-interest-bearing instruments are recorded at maturity value, some accountants contend that so-called discount or prepaid interest exists only as a convenient method of taking up the difference between the recorded maturity value of liabilities and the present consideration received. Hackett compares the technique of accounting for prepaid interest as advocated by professor William A. Paton, with the customary method of accounting for prepaid rent and purports to find an inconsistency in the two methodologies.