Reviews the book "Expenses and Profits of Variety Chains in 1932."

Adopting Professor Henry Rand Hatfield's broad statement of the function of accounting, the possible objectives of accounting research are almost unlimited. Professor Hatfield once stated that the function of accounting is "to place responsibility, to prevent fraud, to guide industry, to determine equities, to solve the all essential conundrum of business. In order to perform this function adequately it is essential for accountants to take full cognizance of the outstanding characteristics of modern business life, to develop and to use effectively available tools of analysis and to recognize in all respects their social responsibilities. The author in this papers confines himself to a series of observations regarding the weakness of present-day accountancy, which will readily bring to mind certain desirable objectives to be attained through accounting research. According to the author, with accountants becoming business advisers, exponents of good financial practice, and fiscal agents of stockholders, the objectives which he had suggested to be attained through accounting research, in view of certain shortcomings of present-day accountancy, may even be too narrow rather than too broad.

The importance of understanding income and profits is readily apparent when one regards them as means to ends which men hold desirable. Statements are made and questions asked everywhere concerning the nature of income and profits and their interrelationships, the amounts and kinds of goods and services actually produced and the amounts and kinds which should and could be produced, the causes of increases and decreases in production and profits and the manner and ratio of the distribution of production among men. It appears that in the U.S., there are yet no good statistical analyses or measures of income with which with confidence to answer these questions. In the accounts of profit-making corporations, partnerships trust estates and so on, the amounts designated by accountants as profit or income may in most cases correspond in a rough fashion to what economists would term profit and as a practical matter it seems acceptable and harmless to consider them as such. What is harmful is the habit of thinking of profit as income and of wages, rent and interest as costs.

Reviews the book "Expenses and Profits of Variety Chains in 1933," by Malcolm P. McNair.

Reviews the book "Modern Accounting Systems," by William D. Gordon and Jeremiah Lockwood.

Reviews the book "The Flexible Budget," by John H. Williams.

Reviews the book "Corporation Financial Statements," by Mortimer B. Daniels.

Reviews the book "A Test of the Consumer Jury Method of Ranking Advertisements," by Neil H. Borden and Osgood S. Lovekin.

Reviews the book "Budgeting," by Prior Sinclair.

The editorial in the December issue of the journal The Accounting Review is entirely right in pointing out the importance at this time of a better development of accounting principles. Everybody engaged in accounting work, whether in teaching or practice, has the feeling that this is a crucial era for the profession and all its adherents. The fact that accountants are, as everybody hopes, on the eve of another great expansion of business activity, makes it urgently desirable that business take every step which may help to make the next period of prosperity healthier and more permanent than the last one. The work of the United States Securities and Exchange Commission is bound to have a vital influence in defining and giving effect to accounting principles. But when the editorial referred to uses this situation as a stick with which to beat the accounting profession, chides it for its tardiness and reluctance to submit itself to a prescribed discipline. The editor is entirely right in his primary contention. This matter cannot stand still. The principles, practices, and literature of accounting must be advanced and developed to the point of being more definite, more helpful, to all the interested parties.