Building upon the author's earlier work [1982], which demonstrated that double-entry bookkeeping is not an absolute system defying extensions but is logically extendible to triple-entry bookkeeping, this paper develops a framework for a triple-entry bookkeeping system and illustrates it by means of a simple example which includes a worksheet, journal entries, and three basic financial statements-wealth statement, momentum statement, and force statement. While the earlier work extended the existing two dimensions of bookkeeping (wealth and Income) into a third dimension under the same measurement unit, namely dollars, this present paper introduces "momentum accounting" under a related but different measurement unit, namely dollars per time period, such as a month, in such a way that, when mathematically integrated over time, momentum accounting articulates with wealth accounting in every dimension. Dealing with earnings rates per time period associated with assets and liabilities, momentum accounting accounts for earnings rates and their changes. Finally, "force accounting" is introduced as the third layer of the accounting system to explain factors that are judged to be responsible for changes in the earnings rate. Its measurement (dollars per month per month, for example) is induced by the measurement in momentum accounting, which in turn is induced by the measurement in wealth accounting. In this way, the extension of double-entry bookkeeping is carried out under a disciplined framework of measurements, which hopefully will direct management's attention and sensitivity to factors at a level deeper than the level of wealth and income that has been traditionally dealt with by double-entry bookkeeping.

[Building upon the author's earlier work [1982], which demonstrated that double-entry bookkeeping is not an absolute system defying extensions but is logically extendible to triple-entry bookkeeping, this paper develops a framework for a triple-entry bookkeeping system and illustrates it by means of a simple example which includes a worksheet, journal entries, and three basic financial statements-wealth statement, momentum statement, and force statement. While the earlier work extended the existing two dimensions of bookkeeping (wealth and income) into a third dimension under the same measurement unit, namely dollars, this present paper introduces "momentum accounting" under a related but different measurement unit, namely dollars per time period, such as a month, in such a way that, when mathematically integrated over time, momentum accounting articulates with wealth accounting in every dimension. Dealing with earnings rates per time period associated with assets and liabilities, momentum accounting accounts for earnings rates and their changes. Finally, "force accounting" is introduced as the third layer of the accounting system to explain factors that are judged to be responsible for changes in the earnings rate. Its measurement (dollars per month per month, for example) is induced by the measurement in momentum accounting, which in turn is induced by the measurement in wealth accounting. In this way, the extension of double-entry bookkeeping is carried out under a disciplined framework of measurements, which hopefully will direct management's attention and sensitivity to factors at a level deeper than the level of wealth and income that has been traditionally dealt with by double-entry bookkeeping.]

The article reviews the book "An Introduction to Corporate Accounting Standards," by W. A. Paton and A. C. Littleton.

Official pronouncements on financial statements restated for general price level (or simply, price-level statements) repeatedly have emphasized that price-level statements be treated as being entirely different from conventional financial statements. Financial Accounting Standards Board Exposure Draft on price-level statements also follows the same approach, emphasizing that conventional statements are stated in units of money while price-level statements are stated in units of general purchasing power. Such an attempt to treat price-level statements as being totally different in units of measurement may be desirable once a frame of reference is established firmly in the minds of users of financial statements. At least until such time, it seems to make sense to provide a bridge between conventional statements and price-level statements to facilitate acceptance of the new statements. The article analyzes and evaluates price-level statements from the viewpoint that their unit of measurement is comparable to that of conventional statements. The difference in figures arises because different accounting principles are applied to them.

The article presents a reply to the article "Measurement in Current Accounting Practices: A Critique," by Raymond J. Chambers, published in the July 1, 1972 issue of the journal "The Accounting Review." First of all, the author states that the book is definitely concerned with accounting as it is. Although policy implications are not completely lacking, the primary purpose of the book is to promote a better understanding of the foundations of accounting as it is, or more specifically the foundations of accounting measurement as observed in current accounting practice. Although an objection is raised, no alternative definitions are given in the critique and it is hard to evaluate the definition without comparing it with an alternative. It seems most natural to consider objectivity in measurement as the degree of independence of the measure from variations in the personal characteristics of the measurers. The author believes that the above responses cover all of the major issues raised in the critique. Because of space limitations, the author had to omit some responses to the remaining questions and comments in the critique, although such responses have been communicated.

The article comments on budgeting principles and budget-auditing standards. Budget audits are similar to audits on audits in the sense that the central task of both types of audits is to check whether reasonable inferences were made in preparing budgets or in preparing audit reports, and not to make inferences by auditors themselves. The budgeting principles and procedures can be divided into two parts, one concerning predictions of events and the other the recording of predicted events. The latter deals with the ordinary accounting procedures after certain events are predicted according to the former. Therefore, if the budgets are to be reported in the form of projected financial statements, accountants may simply quote the generally accepted accounting principles and procedures and state that the predicted events must be recorded according to them. Thus, the cost principle, the realization principle, the matching principle of revenue and costs, etc., will all be observed. In addition to budgeting principles and procedures, a set of budget-auditing standards and procedures must be prepared in order to define methods of examining budget working papers and related evidence which support inferences as well as the extent of examination. They must also provide reporting standards for budget audits. The main purpose of budget audits is to make sure that budgeting processes are carried out as specified by budgeting principles and procedures.

Presents an interview with Professor Herbert A. Simon of Carnegie Mellon University, Pittsburgh, Pennsylvania. Impact of information technologies on organizations; Views on the relative importance of the evolutionary and design perspective of institutional literature; Assessment of the impact of information technologies on accounting and control.

The purpose of this study is to examine some of the relative merits in applying different accounting techniques to the measurement of wealth, and to the measurement of differences in wealth, such as income. The activities of a commodity trading firm are measured using historical cost FIFO, historical cost LIFO, and current cost accounting. Ijiri and Jaedicke's [1966] reliability measure is used as the basis for comparison of the three techniques, which differ systematically because of their different treatments of the stochastic commodity price. Two basic results emerge. First, any advantage of current cost over historical cost because of the recency of the data used in the current cost measurement may be outweighed because current cost does not take full advantage of past data to average out random errors. Second, the reliability of current cost relative to historical cost can deteriorate as the measurement moves from wealth to income (the difference in wealth) and to force (the difference in income).

Presents a reply to the commentary on the study on the quadratic cost-volume relationship and timing of demand information. Types of quadratic cost functions analyzed; Alternative proposed in the commentary regarding fixed costs; Failure of the study to point out the implications of the optimization analysis according to four possibilities.

Let us now summarize the major results of our analyses. First, after discussing the useful properties of a quadratic cost curve, we showed how the timing of information might actually be evaluated relative to the flexibility of operations. We provided a model in which the timing of information alone (not its content) can affect the profit of the firm not in an all-or-nothing fashion but as a factor that may hopefully make a procrastinator more aware of his guilt. Specifically, our analysis of the effect of the timing of perfect information on the total cost of a firm showed that there is a law of increasing marginal loss with respect to information delay. This analysis also serves as an example of how the framework of information evaluation developed by accountants and information economists can be utilized to yield a specific result. We then demonstrated how the quadratic daily cost-volume relationship might be used to evaluate monthly cost performance. The cost variance analysis showed how the forecasting and information gathering ability of the sales department can he evaluated along with the "genuine" cost performance of production operations. We also analyzed the problem of the optimal balance between the timing and accuracy of information in the case where earlier information is of less accuracy. We were able to derive an optimal information timing explicitly from our imperfect information model. Finally, we pointed out that a study on cost curves may have to be more sensitive to the time period on which the cost curve is constructed. A cost curve is not homogeneous with respect to the length of time of the period. A monthly cost curve may have quite a different shape from a daily cost curve if we allow the production manager to optimize.