Abstract The article attempts to stimulate a more systematic method of evolving standard, but evolutionary, rules of accounting. The conclusion follows from two premises. First, rules of accounting have become, in large measure rules of law. Second, that the present methods by which accounting theory is translated into the accounting rules or, if one chooses, into accounting practices, which thus enter the legal system, are not wholly satisfactory, especially in view of the results which now follow from that translation. By consequence, the task of developing a systematic yet flexible means of arriving at and recording the sound doctrine as it appears in the light of the knowledge of the day, takes the foreground as a major problem in the profession of accounting. Economist John Bauer, indicated that accounting development had paralleled, roughly, the enormous growth of business over the past half-century; and he concluded by insisting, also accurately, that the growing control of government over business furnished a powerful spur toward extending the best private practice to all business units in similar fields.

Abstract The student who understands the purpose of a course and who sees how the course will meet his needs has gone far in preparing himself for the study of that course. It is pertinent, therefore, to ask what benefits may be expected from a study of accounting which will justify the necessary expenditure of time. If it be true that the purpose of education is to fit one for living, how does the study of accounting aid in the realization of this aim? Whether one wishes it or not, most students are compelled to spend a large portion of the available time in providing for the necessities of life. The vocational value of bookkeeping and accounting is accepted without question a it is recognized everywhere that efficiency in the use of such knowledge is of direct value to employers. Accounting, however, does more than equip one to hold a mere routine job. Simple record making often leads to more important positions for those who can see beyond boundaries of their first job and who can make use of their experience and opportunities. Accounting provides the background for advancement as it enables one to see how his work fits into the work of other departments. It is not necessary to be a bookkeeper or a public accountant in order to make use of training in accountancy. The subject furnishes one method of learning about the industrial organization of present society.

Abstract This article points out the deficiencies in early cost accounting methods. Early text books on cost accounting commonly carried a graphic presentation of what was known as the cost formula . The formula stated that material cost plus labor cost equals prime cost and prime cost plus manufacturing expense equals cost to make. These propositions and the figure representing them have almost vanished from recent accounting literature, but occasionally they do reappear. It is because of such reappearances that this critique is presented. The earliest attacks on the formula were made by accountants with a economic turn of mind who insisted that few manufacturers were so fortunate as to be able to establish the selling price of their products by adding the desired profit to theft peculiar costs to make and sell. It is certainly true that direct material is no less an asset because it is taken from stores and placed in process or because it is taken from process and placed in finished stock, at least if production is for an existing demand. Without attempting to decide what might or might not be wise business policy relative to producing goods for a market which fails to provide a selling price high enough to cover all costs, it might be noted that the implication of cost priorities does not enjoy universal acceptance.

This paper provides evidence on the characteristics of firms that include “pro forma” earnings information in their press releases, whether the usefulness of pro forma earnings to investors varies systematically with these characteristics, and whether the investor response to pro forma earnings is consistent with market efficiency or mispricing. Using a sample of 249 press releases from 1997–99, we find that firms with low GAAP earnings informativeness are more likely to disclose pro forma earnings than other firms. We also find that strategic considerations, measured using the direction of GAAP earnings surprises, are an important determinant of pro forma reporting. In addition, our examination of the relative and incremental information content of pro forma earnings shows that investors find pro forma earnings to be more useful when GAAP earnings informativeness is low or when strategic considerations are absent. Tests of the predictive ability of pro forma earnings for future profitability and returns are mixed, and we therefore cannot conclusively determine whether the investor reaction to pro forma earnings at the time of the press release is consistent with market efficiency or mispricing. The paper contributes to the growing literature on pro forma earnings and more generally to the literature on voluntary and strategic disclosure.

Abstract Presents a study based on actual accounting treatment and appropriate statutory definitions of distributable equity. Explanation for managers' motivation for declaring large stock distributions and the choice of accounting method; Costly and noncostly methods of accounting.

Abstract ABSTRACT: This paper reports on the technique of Probabilistically Answered Examinations (PAE) as applied to objective tests. The purpose is to establish the relevance of PAE in measuring student performance. A substantive, rather than normative, viewpoint is superimposed, that is, probability assessments are evaluated exclusively within the subject-matter domain in which they are made. After reviewing concepts underlying PAE, it is demonstrated that the methodology is likely to provide more complete information about test scores and the traits measured by the test than that provided by conventional procedures. Examples of performance measures and how they may be applied to PAE are provided.

Abstract Reviews the book "Case Studies in Management Accounting," by John Sizer.

Abstract Reviews the book "Cost Accounting: Principles and Managerial Applications," 3rd ed., by Gerard R. Crowningshield and Kenneth A. Gorman.

Abstract Reviews the book 'Accounting for Social Goals: Budgeting and Analysis of Nonmarket Projects,' by John Leslie Livingstone and Sanford C. Gunn.

Abstract Reviews the book "Cost Estimating for Engineering and Management," by Phillip F. Ostwald.