Knowledge that Transforms

Gross profit variations may be computed to help in the determination of managerial efficiency and the proper amounts for managerial bonuses, and to help in planning and controlling profits. Common solutions are, first, report form, via formulas; and, second, tabular form. As usually presented, the latter shows variety and volume variations as a combined figure, requiring a separate schedule in report form to divide this into variety and volume variations. The procedure advocated herewith eliminates this extra schedule, and obtains separate variety and volume variations in the table itself, by adding one data column. The advantages of compactness and ease of understanding are fully retained; the change is solely one of technique. The first four columns in the table are used to compile the data required in obtaining the variations. The last five columns calculate and present the variations, from left to right. The first variation is the sum of the other four. A mathematical representation of this is mentioned in the article.

Reviews the book "C.P.A. Coaching Course— Problems, Solutions," Vol. 2, by Henry T. Chamberlain.

What is properly labeled "retirement accounting" is a doctrine of great importance. According to this doctrine no depreciation charges, as such, are set up annually on the books and no estimate is made of the periodic depreciation accrual. The significant point of time, in the view of its advocates, is the period when the asset is withdrawn from service. At this time the original cost of the asset is charged to operating expenses. Specifically the procedure sets up asset accounts to which the cost of all property purchased or constructed is charged at the time it is acquired. These charges remain on the books until property is abandoned and then the original cost of the asset is charged to operating expenses. In effect an account like "Retirement Expense" is charged when an asset account is credited for the amount of the original cost of the asset abandoned. The scrap value realized, if the asset is sold, is charged to cash and credited to "Retirement Expense." Or if the asset is "junked" in place of being sold, the charge is made to materials and supplies account and the credit to "Retirement Expense" account for the amount of the appraised value of the asset.

Reviews the book "Income, Saving, and the Theory of Consumer Behavior," by James S. Duesenberry.

The subject of education for controllership is one on which much has been said and written. It is therefore difficult to express any views which are really original. The subject is, however, a fascinating one. This is particularly true because education and the views with respect to it are constantly evolving. Controllership, especially, is a new concept just beginning to emerge in the sense of a definable and measurable type of professional activity. The developmental and controversial character of the subject are nevertheless the very characteristics which make appropriate continuing contributions through new experience and individual thinking. The author therefore venture to add his own thoughts-with the objective, if nothing more, of stimulating further thinking and action which may be the basis of further progress. A number of people have classified the controllership functions in different ways thus seeking to provide some insight into the nature of the job and thus into the type of man required to successfully discharge the responsibilities involved in carrying out those functions.

Reviews the book "Studies in Income and Wealth," Vol.12.

The article focuses on the presentation of the investments in corporate annual reports. There is lack of uniformity which makes it difficult for the reader to interpret the figures, descriptions are usually too limited, and the results of investment operations are almost always buried with other items on the income statements. As a result the reader is unable to judge the ability of management insofar as the investing of funds is concerned. All holdings in subsidiary companies are investments. With this interpretation the investment account would certainly be by far the most important item in many corporate reports. There are several logical reasons for avoiding this treatment and preferring the use of consolidated statements. But even after eliminating all controlled subsidiaries the investment account is still of major importance in most financial statements. Whether the amount involved is large or small, there is a fundamental reason why the investment account deserves special treatment.

The article focuses on the current accounting problems in the U.S. Most of the current problems arise in the appraising of transactions reflecting new methods of doing business or matters upon which there has been a wide difference of opinion among recognized accounting authorities for many years. Thorough analysis and discussion of the new problems and reappraisal of the old controversial problems are matters of mutual interest for all of us here, as well as for the registrants and certifying accountants directly concerned. Experience seems to indicate that most registrants and their independent public accountants prefer to have the financial statements and accountants' opinion contained in the report to stockholders in substantial agreement with the report to be filed with the U.S. Securities and Exchange Commission (SEC). There is no real difference in our requirements for disclosure of inconsistencies in accounting from those which prevailed in the accounting profession prior to the existence of the SEC.

This article discusses various developments related to the field of accounting. In Great Britain, the Association of University Teachers of Accounting held its 1950 conference at Manchester University in September. The secretary of the Association is David Solomons of the London School of Economics. In the George Washington University, Ralph Dale Kennedy, currently head of the department of business administration, has been named head of the newly created department of accounting. In Catholic University of America, District of Columbia, Richard J. Bannon has been appointed instructor in accounting. In University of Alabama, Alabama, Richard Brewer is on leave for the current year teaching at the University of Hawaii. Lee Glover from Hawaii is teaching here on an exchange basis. At University of San Francisco, California, A. D. McNeil, director of CPA training, addressed the California Society of CPA's on the impact of accounting on government and business, at their annual meeting in San Francisco in June.

The article presents information about the accounting faculty of several universities in the U.S. Walter Meigs of University of Southern California, has served recently as chairman of the accounting section at the meeting of the Pacific Coast Economic Association. From the same university. George T. Altman has given addresses on tax matters to the Pomona Valley Bar Association, the American Society of Women Accountants, the California Society of Certified Public Accountant's, the Life Insurance and Trust Council of Los Angeles, and the National Tax Association. H. T. Scovil of the University of Illinois, was selected for the annual award for "outstanding service to the accounting profession" by the American Institute of Accountants at the annual meeting in Los Angeles, Illinois, on November 1, 1949. This is the first time an educator has been given this award. Scovil has been head of the Department of Business Organization and Operation at the University of Illinois since 1917, was the first educator on the Board of Examiners for the National Certified Public Accountant examination.