Reviews the book "Theory of Numerical Roots," by Charles E. Tumminello.

Reviews the book "Operating Results of Department and Specialty Stores in 1939," by Malcolm P. McNair.

The question whether premiums paid upon the redemption of an entire issue of preferred stock should be charged to earned surplus or capital surplus, has been the subject of difference of opinion among accountants for a long time. Even at present, many members of the accountancy profession seem to take opposite points of view in the matter. This study is based on the reasoning developed from the economic concept of profit and loss in business and from the single entry method of calculating profits. The conclusion, that the premium paid upon the redemption of an entire issue of preferred stock is properly chargeable to earned surplus to the extent that the total premium paid exceeds the amount of premium paid into the issuing corporation on the same issue of preferred stock at the time it was issued. The question under consideration does not deal with the treatment of discount on preferred stock when an entire issue is redeemed at a discount. Accordingly, no comment is made on that phase of the subject.

Accountants have often marveled at the misunderstanding of generally accepted accounting procedure and concepts, which the courts have in the past exhibited. Many decisions not only show misunderstanding but also indicate a failure on the part of the courts to attempt to ascertain the meaning of accounting terminology, which their decisions employ. It is unfortunate therefore to find a court in a recent tax decision turning for guidance to "correct accounting" as set forth in theory and practice only to find lack of agreement on the part of accountants as to theory and even greater disparity between theory and practice. It is only fair to state that the court found a similar lack of agreement on the question in the court decisions it examined. The "sale" of treasury shares can never result in "gain or loss." The question of "gain or loss" arises solely at the time of "purchase," not at the time of "sale." The account "treasury shares," carried on the books when stated capital has not been reduced as provided by law, represents an unallocated reduction and adjustment of shareholders' equities. If the treasury shares are later disposed of, the entire amount received from the new shareholder, should be recorded as any issue of stock, the par or stated value being credited to "Capital Stock" and the difference, if any being adjusted through surplus.

Reviews the book "Executive Compensation Practices of Retail Companies: 1928-1937," by John C. Baker.

Reviews the book "Municipal and Governmental Accounting," by Carl H. Chatters and Irving Tenner.

Reviews the book "Principles of Auditing," by F.R.M. de Paula.

This article is concerned less with what actually constitutes common accounting practice than with the soundness of the accounting basis upon which such practice rests. Undoubtedly there are those who would prefer the plural-bases in the belief that no one basis can ever explain the whole of accounting practice. Such reasoning, however, appears to place the cart before the horse, as it is tantamount to making current practice though admittedly contradictory and heterogeneous, the acid test of any accounting basis which may be advanced. Furthermore, there is grave danger that a multi basis approach is but a twist of logic by which individual judgments, based on circumstances wholly foreign to pure accountancy, are substituted for accounting control. Actually, it appears literally impossible that multi basis accountancy can ever establish effective control over business reporting in opposition to contradictory non-accounting judgments based on apparently urgent financial expediency, legal prudence, or business policy. This is all the more apparent when it is realized that many of the individual bases within the multi basis of accounting practice were dictated by circumstances from without rather than by controls from within accountancy itself.

According to the author of this article, it is not his purpose to deal at length with the materials or subject matter with which accounting research might concern it. While some mention will be made of these materials, he is more concerned to develop certain points of view, which he thinks should animate the research worker in accounting. A common assertion by research workers is that a given generally accepted principle ought to be re-examined, or that indeed all of them ought to be re-examined. This is a proposition, which in itself can receive general consent. But it often happens that the statement "that generally accepted principles of accounting should be re-examined" is frequently made by those who already have rather definite ideas for converting those generally accepted principles into something entirely different from what they are, or were ever intended to be. Those accountants who pretend to anything at all along the lines of accounting research cannot ignore the idea which bobs up from time to time, that accountants should try to devise a presentation of their data in entirely new forms.