The article discusses input-output analysis for cost accounting, planning and control. The term "interacting departments" is used here to describe departments, which both make and receive allocations of costs to and from other departments. An example would be a service department which supports several operating departments and which in turn receives support from other service departments. The purpose of this article is to present some more powerful extensions of simultaneous linear equation systems and linear algebra to handle the interactive cost allocation problems. Input-output analysis summarizes transactions between all possible economic units involved, in a square matrix. It is required that each activity produces a single, standardized output. Fixed input-output coefficients, is not permissible for the proportions among inputs used in a process to be varied. A linear homogenous production function requires the relations between inputs and outputs not only to be linear, which is homogenous. In the model, each column of the technological matrix represents a process in the firm's production function.

The article discusses the significance of introducing important tax provisions into advanced accounting. Many accounting courses could be improved significantly by the brief introduction of related tax considerations, preferably in a non-technical fashion. This is particularly true in the case of advanced accounting courses wherein consolidated financial reporting for multi-entity organizations is usually given considerable attention. Decisions regarding the form of corporate and tax reporting for multi-entity organizations are highly tax-influenced. Tax planning is the art of determining in advance what tax liability will result and then conducting transactions with a view toward reducing the income tax burden. In the area of multiple corporations' a group has a choice of accomplishing the same results by more than one method-one of which may result in a lower tax liability. In order to minimize the tax burden, however, management must understand the interrelationship between business operations and the tax liability. A chart was first developed as a testing device for an advanced accounting course. Since students performed so poorly on the question it was later utilized successfully as a teaching aid-originally in an advanced course and subsequently in a tax course.

Reviews the book "Manual on Commercial Law: Uniform Commercial Code Edition," 3rd ed., by A. Lincoln Lavine.

Reviews the book, "Accounting for Extraordinary Gains and Losses," by Leopold A. Bernstein

The article reports on the basis of accounting theory. In 1966, after two years work, a committee of the American Accounting Association issued "A Statement of Basic Accounting Theory." Undoubtedly, the most startling recommendations were the sanctioning of current costs and the advocacy of two column (historical and current) reports. To this member of the committee, however, even more startling was that the near unanimous agreement on the recommendations was arrived at by following two very divergent paths originating from two very dissimilar basic concepts about accounting. The "Value" school within the committee, or as they would probably prefer to be termed the "User need" school, assumed that users' needs are known and sufficiently well specified so that accounting theory can deductively arrive at and produce optimal input values for used and useful decision models. Most of the value theorists visualize accounting's purpose as producing optimum income and capital value or values. Proponents of the "Events" theory suggest that the purpose of accounting is to provide information about relevant economic events that might be useful in a variety of possible decision models. They see the function of accounting at one level removed in the decision-making process

This article highlights the report of the Committee on External Reporting of the American Accounting Association. In accordance with the general approach as outlined in the preceding section, the first step in the evaluation of external accounting practices was the development of a normative investor's valuation model. This model had to include the variables and interrelationships which should be considered by an investor. In order to limit the scope of the analysis, the following valuation model relates primarily to long-term investors in equity and fixed income securities, that is investors who intend to retain their positions for relatively long periods. This does not necessarily imply that the model is of no value to the short-term investor. However, short-term investors are generally more interested in changes in security prices than in cash distributions by the firm; and short-term fluctuations in security prices are frequently more closely related to external factors in the economy than to expectations regarding the individual firm. This condition makes accounting data of less assistance to short-term investors than to those interested in taking a long-term position in corporate securities.

Reviews the book "Business Data Processing," by Elias M. Awad.

Reviews the book "Introduction to Data Processing," by F.R. Crawford.