Knowledge that Transforms

Reviews the book "Accounting Principles and Control," by Lawrence L. Vance and Russell Taussig.

This article focuses on the conceptual framework which may prove better than analysis of variance which is considered to be very important in cost accounting. Conceptual framework is better because it distinguishes long-range and short-range factors, demonstrates the weaknesses of existing practices, sharply pinpoints responsibility in relation to the purposes of short-range planning and control and separates the role of physical measures of capacity from the role of valuation of that capacity, and indicates how a contribution-margin or opportunity-cost approach to valuation is superior to a unitized historical-cost approach. Organizations assemble human and physical resources that provide the capacity to produce and sell. These commitments often require heavy expenditures that affect performance over long spans of time. The implications for managers are twofold. First, careful planning. Second, the acquired capacity. Many fixed costs result from capital budgeting decisions, reached after studying the expected impact of these expenditures on operations over a number of years. The choice of a capacity size may be influenced by a combination of two major factors, first provision for seasonal and cyclical fluctuations in demand. Second, Provision for upward trends in demand.

Reviews the book "Business Budgeting and Control," by J. Brooks Heckert and James Willson.

Reviews the book "Practical Accounting and Auditing Problems," by Edmund F. Ingalls.

Reviews the book "An Introduction to the Theory of Financial Statements," by Robert W. Gibson.

Reviews the book "Accounting for Costs of Financing," by H.S. Moffet.

This article focuses on the nature and scope of the activities of the U.S. public accounting firms. While it is not possible to present definitive statistics on the degree of audit penetration of large public accounting firms in the corporate sector, we believe the data contained in this paper are broadly suggestive of the contours of the audit work done for large corporate clients by large U. S. public accounting firms. The data, consisting of information culled from corporate annual reports, may suggest to the incautious reader that a high degree of conceptual precision has been attained. the data contain several statistical weaknesses, most of which inevitably exist in studies of this kind. These weaknesses are brought out at the beginning of the paper in order to emphasize their presence. They encompass (1) the sample, it omits certain industries and is not nearly so large as other usable lists. (2) reliance on other auditors, The appearance of an auditor's opinion in the annual report of a company. (3) the rank-criterion of revenues, while total revenues would seem to be an appropriate criterion and (4) classification of companies into industries, It is exceedingly difficult today to draw lines between industries and to classify particular companies into industries..

The tax deduction for travel expenses available to a professor who temporarily leaves one U.S. institution to visit a second is an open question of both law and fact. The strongest case for a deduction can be made in those instances where a professor incurs a substantial amount of duplicate costs because of his visiting status and has made a firm commitment to return to his initial employment within a period of less than twelve months. In those cases where a minimum duplication of costs is incurred, the visiting professor should give serious consideration to deducting moving expenses under Sections 62 (8) and 217, rather than traveling expenses under Section 162 (a) (2). Obviously, acceptance of the latter alternative necessitates either (1) giving up the contention that one is away from home or (2) arguing in the alternative. Suffice it to note here that the deduction for moving expenses is limited roughly to the cost of transporting the taxpayer's family, household goods, and personal effects from one location to another, including the cost of meals and lodging while enroute, but not even temporarily after arrival.

Reviews the book "The Evolution of Direct Costing," by Charles Weber.

Abstract this article focuses on the accounting concepts useful for accounting students. The ultimate test of one's knowledge of concepts (as opposed to his rote memorization of their definitions) lies in his ability properly to apply the concepts to problems or situations with which he has never before been confronted. The "investment funds" concept is, like the investment credit, an attempt to achieve certain objectives of fiscal policy by inserting special provisions in the tax law. The investment funds system is a tax incentive scheme designed to promote a shift of private investment from periods of boom to periods of recession. The investment funds concept described in the article is a highly simplified version of a system currently in use in, Sweden. The assignment could have been made considerably more difficult by making the definition of "investment funds" more closely correspond to the Swedish system.