The article focuses on accounting principles for the investment credit. Opinion number two of the Accounting Principles Board indicates three separate and acceptable methods of accounting for investment credit. Method number one follows the concept of tax law by treating the credit as a reduction of the cost of the asset and apparently it is the method favored by the majority of the Board. One important advantage of this method is that the depreciable base is ordinarily the same for tax and financial purposes. Method number two follows the concept that the credit is a direct reduction of tax expense to be pro-rated over the life of the asset. An interesting aspect develops when full current use of the Investment Credit is not possible because of the limitation in the law. The investment credit carry-forward may be applied against the tax liability in any one or all of the five succeeding years. The entries under each method would be to write off the carry-forward against the tax liability.

Reviews the book "Depreciation and Replacement Policy," edited by J.L. Meij.

1962 annual meeting of the American Accounting Association was held at East Lansing, Michigan on August 27-29, 1963 with the College of Business and Public Service of Michigan State University as host. The meeting was one of the largest and most successful in the history of the Association. A number of interesting tours and special luncheons were provided for ladies attending the meeting, and special programs were arranged for teenagers and children, including dances, movies, swimming, and educational campus tours. At the luncheon and business meeting president Raymond C. Dein presided and gave a report on Association activities for the year. A motion to accept the report of the Nominations Committee was made from the floor and carried, instructing the Secretary-Treasurer to cast a unanimous ballot for the foregoing slate of nominees. At the banquet on the same evening, Dein introduced the officers and guests at the speakers table and the newly elected 1963 officers.

It has come to be considered high praise of any field to call it a science, and conversely, few epithets are stronger than unscientific. Part of this prestige of science is of course due to the great achievements of the natural sciences, and a further explanation is provided by the typical looseness of popular usage of language: unscientific has become a synonym for sloppy. But without attempting to deprecate science in general, it is worth mentioning that the grounds for the prestige of science are nebulous. Surely usefulness is not the criterion, for cooking is more useful than astronomy; nor is aesthetics, for most men prefer music to chemistry. The difficulty of the subject matter of sciences is undoubtedly a factor, but here two things may be said. On the one hand, no subject is difficult to those with aptitudes and training in that direction--a modern Gauss could master higher mathematical analysis much more easily than an ordinary city dweller could learn to farm. And on the other hand, difficulty is a most ambiguous concept--there are many more men who can understand modern physics than can run 100 yards in 9.8 seconds. In sum, to say that economics is a science is a description, not an encomium.

Under the entity concept, alternative accounting procedures are designed to permit a corporation to change its strategy for survival in the light of its economic and financial outlook. To this extent alternative accounting procedures have financial implications. In as much as the funds statement is a report of a corporation's financial operations, it is argued that all income determinants that are subject to alternative treatment need be included in the funds statement on the strength of their having financial implications. This argument is submitted as the reason why some non-fund adjustments receive prominent attention in funds statement preparation and why others do not.

Under the entity concept, financial statements are considered to be means through which a corporation's point of view is made known. As a corporation moves from one stage of development to another, changes in accounting procedures are needed so as to depict properly its changes in outlook and strategy for survival. So long as disclosures are made, and if coupled with education and/or public accountants' evaluations, it is contended that the use of alternative accounting procedures will not only make financial statement presentation more revealing and meaningful, but also permit corporations at different stages of development to compete for financial competence. The use of alternative accounting procedures is thus consistent with a corporation's objective of survival.

The article presents information on the difference in treatment by tax laws in various types and amount of income. As long as the income tax laws make a distinction between the taxation of ordinary income and capital gain, there is the difficult problem of determining the real nature of oil and gas as it is severed from the earth. On the other hand, the production of oil is a business and business income is considered to be ordinary income. Replacement Value, on the other hand, if oil is considered to be stock in trade, then percentage depletion provides a benefit. One method to assure the oil investor a return of his invested capital tax-free would be to charge all net profits to a reserve for depletion until the aggregate amount in the reserve equaled the amount of investment in the property; then no further depletion would be allowed. This would serve to reduce considerably the depletion now allowed the lessor. The tax laws are full of instances of differences in treatment for various types and amounts of income, due as much to political considerations as anything the. Percentage depletion is one more example of the conflict between proper determination of net income and the measurement of taxable income.

The article presents information on accounting examinations. The following problems were prepared by the Board of Examiners of the American Institute of Certified Public Accountants and were presented as the second half of the Certified Public Accountant examination in accounting practice on May 16, 1963. The candidates were required to solve problems 1 through 4 and either 5 or 6. The suggested time allowances were as follows: thirty-five to forty-five minutes for problem 1, thirty-five to forty-five minutes for problem 2, fifty to sixty minutes for problem 3, fifty to sixty minutes for problem 4 and fifty to sixty minutes for problem 5 or 6. Problem 1 presents certain objective questions related to accounting. Problem 2 is concerned with the preparation of the trial balance of a partnership firm. Problem 3 is concerned with the preparation of the shareholders accounts, the journal entries for the books of Groth Corp. recording the merger with Dekline Corp. as a pooling of interest. Problem 4 is concerned with the preparation of the company accounts for the machinery department.

This article provides information about professional examination of accounting. The following problems were prepared by the Board of Examiners of the American Institute of Certified Public Accountants (C.P.A.) as the first half of the C.P.A. examination in accounting practice on May 13, 1964. The candidates were required to solve problem one through four and either five or six. Time allowances were assigned as per the problem. Some of the questions were, John Andrews is a principal partner in two separate partnerships, A and B, Partnership A's fiscal year ends June 30 and Partnership B's ends September 30. As partner, Andrews' share of the partnerships' taxable income for the fiscal years ending in 1963 was $8,000 and $20,000 respectively. Andrews, who reports on a calendar year basis, would report taxable income for 1963 from partnerships of, five options were provided, out of which one was correct. Another question was, in computing the taxable income of a partnership for 1963 a deduction is allowed. Five options were provided for the same.

This article presents an account of problems prepared by the Board of Examiners of the American Institute of Certified Public Accountants and that were presented as the first hail of the Certified Public Accountants examination in accounting practice on November 7, 1962. The candidates were required to solve all problems. One of the problem stated that Bessie Smith, age 65, is the widow of Alan Smith, who died in 1960 at the age of 72. Mrs. Smith has never worked; however, she collects social security benefits based upon her husband's 15 years of covered earnings. She has no dependents. Further details regarding the income for the year 1961 were giver and the examinees were required to fide total dividends to be included in adjusted gross income of the widow, rates at which Smith's income tax is computed and Smith's retirement income credit. Question were also based on taxable interest, cost depletion, percentage depletion, installment method, gross income and depreciation. Time limits information has also been provided.