Knowledge that Transforms

Reviews the book "Cost Accounting Bibliography," A.L. Prickett.

Reviews the book "Financial Accounting," by George O. May.

In this article Navy expenditure classification by objects is considered. The Bureau of the budget prescribes an "object" classification by which budget estimates are to be submitted. Therefore, spending agencies provide an expenditure analysis by such objects to support their budget estimates and to meet the Bureau of the Budget's requirement for such a classification. This classification of expenditures by objects is accomplished in the Navy Department by coding disbursement and expenditure documents; procurement requisitions, contracts, etc., leading to public vouchers, the Analysis of Labor Roll Summary by Expenditure Classifications, a monthly report for labor similar to the Analysis of Materials Summary by Expenditure Classifications; and a Schedule of Collection Provision for this classification may be noted on the sample form of the Analysis of Materials Summary by Expenditure Classifications at the bottom of the form in a separate schedule. The object classification required by the Bureau of the Budget of all Federal departments permits the preparation of a statement of the total expenditures of the Federal government by broad classifications of expenditures. It may also he used to compare in a broad manner the operation of various departments in several respects, for example, the proportion of total expenditures charged for personal services.

Reviews the book " Trends in Auditing and Reporting," by Samuel J. Broad.

This article focuses on the reducing accounting costs. Much has been said and written about the miracle of production accomplished by American industry during the war, and undoubtedly most people think of that accomplishment in terms of such items as tanks, planes, ships, etc., which were produced in unbelievable quantities. Accountants may not wish to use the word "miracle" as applying to their contribution to the war effort. The automobile industry was probably the first large industry to recognize the possibilities of breaking down the construction of a complicated piece of apparatus into simple, routine, repetitive operations and to place each operation in its proper position in the factory in relation to all the prior and the subsequent operations. To accomplish this, it was obviously necessary to visualize the source and manner of providing original raw materials and to have an exact knowledge of the finished product. In most large companies, two of the routine operations in the payroll department are, to calculate the gross earnings of the employee and to pick up gross earnings and make the necessary payroll deductions while developing both the net cash payment to the employee and sufficient deduction detail to account properly or the respective deductions.

Few economic theorists have much knowledge of cost accounting, while many cost accountants know very little of economic theory. As a result, literature on costs from the economic side only too frequently reflects an ignorance on the part of its writers of the practical difficulties of costing, or else their neglect to take the practical side into account at all. On the other hand, the writing done by many cost accountants is mechanical arid, although by no means useless, has less value than ought to be the case. The economist differentiates between fixed and variable costs and he uses the terms such as marginal cost and average cost, along with marginal revenue and average revenue. According to the economist, the enterpriser does not require a proportionate amount of the cost of his long-lasting equipment to be covered by revenue in any short period. It is recognized that, at times when output is low, revenue may afford little if any contribution toward the cost of such equipment. A shortfall of this kind is expected to be compensated by an excess arising at another period, when revenue is larger and a heavier contribution can be made toward the cost of the equipment.

Reviews the book "Economics," by John Ise.

The Revenue Act of 1942 established legislation regulating the manner of taking war losses. The right to deduct such losses in computing taxable income had already existed under the casualty-loss provisions of the income tax law. After the World War I, property losses were difficult to establish, because there was a lack of specific provisions in the law and regulations, and this gave rise to delays, complications, and numerous inequities. Section 127 of the 1942 Act was provided to avoid a repetition of the previous experience. The taking of deductions was facilitated by allowing them on the presumption that the property had been destroyed or seized. The major point to be observed is that the new provisions made it possible for taxpayers to get the benefit of the loss deemed sustained in an enemy country at the approximate time deemed sustained, without actually proving the destruction or seizure of the property involved. At the time of writing the 1942 Act, it was recognized that after the war many properties deemed destroyed would be recovered in whole or in part.

Reviews the book "Practical Management Research," by A.R. Wiren and Carl Heyel.

Reviews the book "The Fundamentals of Accounting," by Donald H. Mackenzie.