Knowledge that Transforms

The article focuses on the aspects of training for more effective accounting instruction. Every new staff person should have the opportunity of participating in a planned program of orientation to his work as an instructor. The American Accounting Association (AAA) sponsors a staff training project in about 4 or 5 institutions in the country, having a number of new accounting instructors each year. It would indicate to other professional and academic organizations that the AAA is interested in the quality and effectiveness of teaching staffs in the field of accounting. Some of the features of this experimental program are now being carried out at individual institutions. The mutual interchange of experiences and the subsequent publication of the results of the experiment would have a lasting impact on the entire accounting educational process. The success of this program would encourage more capable young people to become interested in potential careers in the teaching field.

The graduate program in accounting, particularly at the master's level, should be founded on the philosophy that the student must be provided with a core of courses which are professionally oriented. The graduate course in income taxation should presuppose that the student has acquired in previous study, or experience, the fundamentals of accounting technique, that he has a knowledge of accounting terms and their meanings and that he has the facility to think logically and clearly in an accounting frame of reference. In addition the student should have completed a basic study of income taxation either at the undergraduate level or as prerequisite to the graduate course. Assuming that each student enrolling in the graduate course enters with this background, the graduate course should be specifically directed toward the analysis and the discussion of more complex problems on a professional level and with professional emphasis. Other subjects which should be covered are those problems frequently found in the preparation of estate tax returns, estate income tax returns, gift tax re- turns, other fiduciary return problems and procedural matters, such as collections, assessments, rulings, compromise agreements, and the like.

Reviews the book "Statistical Sampling for Auditors and Accountants," by Lawrence L. Vance and John Neter.

The article presents a professional examination for accounting practice. Problems were prepared by the Board of Examiners of the American Institute of accountants and were presented as the first half of the C.P.A. examination in accounting practice on May 15, 1957. The candidates were required to solve Problem 1; any two of Problems 2, 3 and 4 and either Problem 5 or Problem 6. The total weight assigned to this section was 50 points and the examiners point out that the suggested time allowances given below are closely proportional to the point value of the various problems. It is the regular practice of the business at the time a contract is received to set up the full contract price by a charge to Accounts receivable and a credit to Unearned contract sales. As work progresses on an individual contract, progress billings are sent to customers. No entry is made on the books for such progress billings. Collections are entered as a credit to Accounts receivable. Income is recognized on a completed contract basis for statement purposes. At the examination candidates were furnished a work sheet for Problem 5 containing the material in the first two columns of the solution work sheet. With respect to Problem 6, candidates were given the T accounts to be used in preparing their solutions.

The article discusses about the achievement of success in Certified Public Accountant examination. In raising the question of academic background, the candidate will find general agreement on the desirability of a full academic course leading to a college degree. However, he will encounter conflicting views with respect to the nature and the extent of the college work to be undertaken. The study covers those students who sat for the CPA examination immediately after completing a four-year academic program that included courses in a "field of concentration" directed to professional public accounting. The course offers a review of contemporary accounting theory with emphasis upon the pronouncements of the American Institute of Certified Public Accountants and the American Accounting Association. During the course of study the student works some fifty to sixty problems taken from the accounting practice parts of past CPA examinations. The course aims to provide students with a full appreciation of the framework of contemporary theory and the ability to solve practical problems within this framework. Those persons with high accounting aptitude who achieve a superior accounting record in a four-year college program composed of liberal arts, business, and accounting studies similar to that described, can look forward to high achievement on the CPA examination taken immediately upon the completion of academic studies.

Reviews the book "How to Communicate Policy and Procedure," by Joseph D. Cooper.

The definitions related to fixed assets are listed in descending order of frequency of usage. The first definition is by far the most frequent, appearing just over one-half of the time. The least frequent definition appeared a little less than ten per cent of the time. The differences here are differences in the scope of the fixed assets category, although every definition excludes those assets which would be classified as "current." The definitions tend either to set up categories for permanent investments or intangibles as separate from the current and fixed asset categories, or they tend to include one or both within the fixed asset group. No amount of any asset would be different under one fixed asset definition or another. The preparation of a balance sheet forces, in effect, the selection of one of the definitions. The income statement is unaffected by a choice of classifications. It is agreed that fixed assets include none of the items which should be classified as current assets.

Reviews the book "Regional Income."

The article attempts to classify and analyze some of the reporting problems created by substantial tax on business income. The first section of the article discusses the points for analysis which include the consideration of income taxes to be an expense by businessmen and accountants, problems concerning the location of the tax provision in a financial statement of a given year, and cases where both accounting convention and tax law agree on items to be recognized as revenue or expense but disagree as to the period in which the item is to be reported. The second section illustrates problems relating to allocation of income tax charges and credits to operating and in operating income and retained earnings and the effects of differences between the time of recognition of revenue and expense under accounting conventions and tax rules. The third section discusses accrual and prepayment of taxes with examples of charge deducted for tax purposes. The fourth section illustrates the principle that taxes should follow income and the major barrier to satisfactory solutions of the problems of tax allocations.

The 1956 annual meeting of the American Accounting Association offered an ideal opportunity to combine a first-class vacation trip with the meeting of friends and members of the association. It was held on August 27, 28, and 29, 1956, in Seattle, Washington, with the College of Business Administration, University of Washington, as hosts. The morning sessions of the convention program were devoted to the topics of faculty development and the tentative statement of cost concepts underlying reports for management purposes. Special activities included a boat trip across puget sound and a salmon bake held at Illahee State Park on Monday afternoon and evening. The association is greatly indebted to the committee on arrangements and the ladies program committee for the excellent facilities and arrangements made for them. A motion was made from the floor and carried accepting the report of the committee on nominations and instructing the secretary-treasurer to cast a unanimous ballot for election.