Reviews the book "Introduction to Accounting for Students of Economics," by C.A. Ashley.

The article presents a discussion on testing the ability of the prospective candidate to enter the public accounting field, by examining the certified public accountant (CPA) examination standards in the U.S. The standard examination given by forty-six state and territorial accounting boards is prepared by the Board of Examiners of the American Institute of Accountants. Both educators and public practitioners have a definite part to play in preparing the candidate for the CPA examination. This brings up a very controversial subject, since most educators feel that the college graduate should be permitted to sit for the examination without experience, whereas most public practitioners lean to the belief that a man must have public accounting experience before he should become eligible for the examination. Presenting his opinion the author says that no candidate should be permitted to sit for the CPA examination until he has had a minimum of two years' public experience, or five years' private accounting experience.

The difficulty presented by a circuit of intercom any ownership relations is familiar to those who are conversant with the preparation of consolidated statements. If Co. A owns 4/5 of the stock of Co. B and B owns 3/4 of the stock of C while C in turn owns 1/10 of A's stock, we have a situation which leads us into an infinite series when we apply the usual process of preparing a consolidated balance sheet. The equity of each company is dependent upon the equities of all of the other companies within the circuit. The standard method for the solution of problems of this type is the use of simultaneous equations. Each company has title to its own assets but of course those assets are subject to the claims of creditors so that the equity of stockholders in them is their net value. The profits earned after consolidation could be carried round and round the circuit until the remaining portion did not exceed one cent. Usually the fractional part of the stock of the major holding company in the group, which is owned by a subsidiary company, is small. As a result the amount carried forward to succeeding rounds of the circuit is rapidly reduced. But in spite of this fact the application of such a method would be very cumbersome indeed. However, it suggests a simple process, which obviates the necessity of using simultaneous equations.