Knowledge that Transforms

The article presents a heuristic approach to effective rates of interest being charged on loans repaid in equal installments. For instance, a situation is considered in which a one-year loan to be repaid in 12 equal monthly installments and a 6% interest rate quoted on the original unpaid balance is calculated. Figuring the average amount of outstanding principal for the year and dividing that amount into the interest charge to compute the effective rate would compute the effective rate of interest charged. A short-cut computation is available to convert from a quoted rate to an effective rate but noting that it is only necessary to multiply the quoted rate by the ratio of the original principal to the average principal outstanding. Still, a further shortcut is to note that the average principal outstanding is equal to the average of the sum of first schedule balance and last schedule balance. Assuming a 36-month loan to be repaid in equal monthly installments and a 6% annual interest rate quoted on the original unpaid balance effective rate is calculated. The result suggests that the effective rate could approach but not exceed twice the quoted rate.

Reviews the book "A Study of Some Accounting Problems in the Oil Industry."

The article reviews the book "Objectivity in Accounting," by Curtis Holt Stanley.

The article reviews the leading tax problems of U.S. investors in foreign companies in 1966. It also considers how accountants with their background in evaluating income measurement can aid in making tax barriers more suitably distributed for companies or individuals in the U.S. who are interested in direct investments abroad. The author concludes that it is true that equitable treatment concerning the imposition of taxes on a party operating in different jurisdictions is a responsibility primarily of the party himself. In addition, he observes that the problems are different from the ones usually found because of the international aspect, but many of them can be better resolved after a fresh look at the income theory angle.

The basic requirement of every academic editor is that each article be a scholarly contribution to knowledge of the field. Contributions in an academic journal may be made by recognizing new problems of the field and suggesting possible solutions. Opportunities for contributions comes when new techniques are devised or become available for the solution of old problems, or when some new programs or new thoughts not always forthcoming as promptly to avoid a new problem. Another type of scholarly contribution may be made in the form of historical analyses. Another dubious candidate for scholarly effort is the voluminous compendium of what others have said on a subject with no adequate or new criticism or evaluation. Manuscripts submitted by authors usually go to the printer in the case of an academic journal, so it should be clear and readable to the editor also. Editor's do have obligations, therefore, a broad view of the possible forms of scholarly contribution is also needed by the editor of a scholarly journal, certainly if the journal is designed for a fairly large and diversified audience.

During recent years the role of the U.S. government has increased the scope of operations of nonprofit-oriented organizations. The recently-enacted Medicare legislation is a case in point. This act promotes the production and consumption of health services. The purpose of this article is to focus attention on some of the accounting problems of public health nursing associations. organizations. In general, these associations are tax-exempt as a nonprofit, charitable institution; but their behavior is that of any business enterprise engaged in the production and distribution of a consumer service under various conditions of market competition. They use costs and prices, as well as every other market mechanism reflecting a business culture. Questions have been raised with regard to principles and practices as they relate to statement presentation, disclosure and materiality criteria, cost accounting for pricing purposes, the entity concept, and a variety of other matters. This discussion, it has been hoped, will stimulate interest in some of the difficulties faced in accounting for nonprofit-oriented enterprise in general and in accounting problems of public health nursing agencies in particular.

The accounting fraternity has employed regression analysis rather infrequently. This article presents an application of multiple regression analysis to cost control. The context of the application is the consumer finance industry where extensive decentralization makes effective cost control extremely important. The consumer finance industry is made up of companies whose principal activity is making personal installment cash loans under state small loan laws. The cost behavior model employed in this article is developed from the results of multiple regression analysis of cost and other operating data of branch offices of a major consumer finance chain. While the consumer finance industry is used as the basis, it should be emphasized that the procedure outlined would be applicable to other types of businesses as well. The article shows that an important requirement for the applicability of the procedure is the existence of a relatively large number of homogeneous operating units. Consumer finance companies meet this requirement particularly well. However, other types of business also operate with large numbers of homogeneous units-food including service chains and lodging chains. The procedure outlined would, therefore, be applicable to them as well.

The article explores the presence of accounting in the Zenon papyri of the Greeks. The manuscripts give evidence of a surprisingly elaborate accounting system which had been used in Greece since the fifth century B.C. All accounts were audited, as evidenced by a sloping downstroke or a heavy dot in front of each figure. The Zenon papyri include several monthly, annual, and even triennial summaries of accounting transactions. Their most remarkable feature is the high degree of accounting control and the business-like efficiency of central management.

The article reviews the book "Contemporary Issues in Cost Accounting: A Discipline in Transition," edited by Hector Anton and Peter Firmin.

Reviews the book "The Computer—An Accounting Tool," by Gerald Wohl and Heinz Jauch.