Knowledge that Transforms

Reviews the book, "Input-Output Analysis," by Shawki M. Farag.

This article highlights the report of the Committee on Managerial Decision Models of the American Accounting Association. Accountants continually work with accounting systems and financial reports, which are financial models of company operations. Models are useful because they provide a conceptual representation of realities, enabling the decision maker to anticipate and measure the effects of alternative actions. In this section, one briefly discuss the general characteristics of decision models. A model is a depiction of the relationships among the recognized factors in a particular situation; it emphasizes the key interrelationships and frequently omits some unimportant factors. Models have many forms and purposes: they may be descriptive or predictive; mathematical, physical or verbal; dynamic or static, and so on. Decision making is choosing among alternatives; it occurs as managers conduct their planning and controlling functions. A decision model is one which, in effect, performs management's planning and control functions-but only to the extent that management delegates when the model is constructed and implemented.

Reviews the book "FORTRAN IV," by J. Daniel Couger and Loren E. Shannon.

In the discipline of accounting, "goodwill" has been a thorny problem. A lot of people from all walk of life have tried their hands in defining goodwill but still they could not give a universal definition. The main cause of the arguments seems to be that the real nature of Goodwill has been submerged in the literature by the methods that we have been forced to use in practice when calculating the total values of entities. Goodwill exists because assets are present, even though they are not listed with the tangible assets. For example, "special skill and knowledge," "high managerial ability," "monopolistic situation," "social and business connections," "good name and reputation," "favorable situation," "excellent staff," "trade names" and "established clientele" are assets in this category. In the valuing process, each asset would be valued by discounting all of the net future cash flows that it was expected to create, irrespective of whether or not these indicated excess profits, or normal profits, or low profits, or losses.

The bookkeeping procedures have been described as an information process of data collection, classification, tabulation, summarization, and presentation. The accounting classification and measurement function tends to be overlooked due to the clerical work involved in it. The financial state of the firm is continuously changing, of course, because of the occurrence of economic events. It is the accountant's function to recognize their effect on the financial state. A general accounting process may be described as a means of achieving the decision-making end of an accounting information user. This paper centers on the first part of the process-the information formation process, a process by which the accounting classification and measurement function determines the effect of an economic event on a firm's financial state. A communication channel model is used to describe the accounting classification function as the link between the various economic events of a firm and its financial state. The accounting channel of classification may be deterministic, lossless, or noisy as defined in information theory.

The article presents information about the American Accounting Association. The purposes and objectives of the Association shall be: To initiate, encourage and sponsor research in accounting and to publish or aid in the publication of the results of research; To advance accounting instruction and to encourage qualified individuals to enter careers in the teaching of accounting; To advance the development and application of accounting concepts and standards and seek their adoption for financial statements prepared for external purposes; To advance the development and uses of accounting for internal management purposes. 5. To advance a widespread knowledge of accounting among qualified students and the public generally. Accounting teachers, public accountants, accountants from business and government and other persons interested in the advancement of accounting shall be eligible for membership in the Association. The Executive Committee shall be responsible for directing the affairs of the Association and shall formulate such plans, policies, rules and procedures as needed to achieve the purposes and objectives of the Association. The operation of the administrative office and the duties and powers of the Administrative Secretary shall be determined by specific action of the Executive Committee.

Reviews the book, "Depreciation Accounting and Economic Analysis," by Shinkichi Minemura.

Reviews the book "Characteristics of an Effective Management Control System in an Industrial Organization," by Robert H. Demino.

Reviews the book "Cases in Accounting and Business Administration," by L.S. Rosen.

This article focuses on the income concept, which deals with many major accounting problems. The main focus is on two general concepts, income as an increment in value and income as a predictor of earnings. These may be useful in resolving some problems of income measurement. An understanding of these two concepts may also be helpful in deciding questions of presentation of financial position. The theories underlying income measurement and financial position presentations are, of course, completely intertwined. In practice, the measurements of income and financial position are also fled together, but not always in a beneficial manner. Too frequently the accountant approaches a transaction and chooses the method for recording it that better measures income or better measures the financial position of a corporation. In this paper the author will develop a means of evaluating different ways of recording transactions, without compromising on the quality of either the measure of income or financial position.