Knowledge that Transforms

Reviews the book "Intermediate Accounting," by Arnold W. Johnson.

Reviews the book "Design of Accounts," by F. Sewell Bray and H. Basil Sheasby.

Reviews the book "Practical Controllership," by David R. Anderson.

Even the most convincing advocates of the cost basis of valuation and income determination in accounting are impelled to approve an exception in the case of donated fixed assets. Most of the writers agree that donated fixed assets should be recorded at appraisal figures by an entry debiting fixed assets. There are those who see no objection to crediting paid-in surplus or capital surplus, depending upon the sources of the donation and tim suggested breakdown of the surplus accounts. Most sources concede that the admission of donated fixed assets to the accounts at appraisal figures is inconsistent with the cost basis of accounting. But, instead of recommending that the donated assets be recorded at the nominal figure of one dollar, the booking of the asset at appraisal figures is not only recommended but preferred. Those who profess the cost basis of accounting not only advocate the booking of donated fixed assets at appraisal figures, but frequently acquiesce in the charging of depreciation on donated fixed assets to revenue. The recording of donated fixed assets at appraisal figures is not consistent with the cost basis of accounting.

Present federal income taxes are based on the Sixteenth Amendment to the Constitution giving the U.S. Congress the power "to lay and collect taxes on incomes from whatever source derived, without apportionment among the several States and without regard to any census or enumeration." Simple as the amendment appears to be, the question of "what is income" has become the subject of limitless disagreement among Congressmen, taxpayers, accountants, lawyers, and representatives of the Bureau of Internal Revenue. The very term "income tax" implies that the tax is to be on income and that receipts which are not income are not to be taxed. There is also ample evidence to indicate that it has been the intention of Congress to levy the tax, with minor statutory exceptions, on only true net income as determined by the application of sound accounting procedure. Nevertheless, a gap has always existed between net income as computed for federal tax purposes and as determined according to generally accepted accounting principles for business purposes. That breach appears to be gradually widening and has already reached such proportions that business is experiencing considerable difficulty in keeping records that arc adequate for both needs. The goal of business accounting is to arrive at as nearly correct an approximation of the results of operations for each business unit as is possible.

Reviews two books "Profit Sharing and Pension Plans (Practical Planning and Administration)," by C. Morton Winslow and "Profit Sharing and Pension Plans (Law and Taxes)," by K. Raymond Clark.

Reviews the book "Mathematics of Business and Accounting," by Kenneth L. Treffzs and E.J. Hills.

Reviews the book "Principles of Economics," by Frederick Benham and Francis M. Boddy.

The topic assigned, that of discussing the graduate accounting curriculum from the viewpoint of schools offering undergraduate concentration in accounting, presents an opportunity to explore various phases of a most interesting and important subject. Prior to the twentieth century graduate work appeared to be limited to a high type of scholarship looking toward an intellectual career as opposed to a professional career. Accounting is universally recognized today as a profession ranking close if not on par with the older professional pursuits. The American Institute of Accountants has made extensive progress in preparing tests to ferret out those individuals with accounting aptitudes. Of late there has been developing some sentiment among some professors in some schools that the time put into writing a formal thesis could be better used in some other direction, such as additional courses or even field work. The MBA candidate should be required to pass a comprehensive test either written or oral or both. This examination to have any meaning and significance should be taken seriously by the examining committee as well as by the candidate.

Reviews the book "Essential Business Mathematics," by Llewellyn R. Snyder.