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COMMENTS ON PROFESSOR LITTLETON'S PAPER BY WALTER STAUB.

Walter Staub
The Accounting Review 1936 11(1), 15-18
Professor Littleton's paper seems especially timely in view of the present day ideas accounting as a record of original prices and widely fluctuating prices as a normal pattern-there seems to have come the conviction that accounting for outlay cost can no longer be considered a dependable guide to those who look to accounts for essential information. And the conclusion then follows that account keeping or financial statement practice must be modified to suit the new background. The assumption that problems of income distribution dividends, income tax, speculative security profits are of more importance than problems of the measurement of the income generated by the creation of new wealth or the rendering of acceptable services. The assumption that accounting has a more important obligation to supply data useful in managerial pricing policy than it has in facilitating the comparison of past input of services costs with past output of services revenues. The assumption that accounts and statements are merely tabulations of statistical data related to social income and as such are open to any desired manipulations by statistical methodology, such as weighting by index numbers, reduction to averages, elimination of seasonal variations, etc.

ADEQUATE RECORDS AS AN ELEMENT IN BUSINESS SURVIVAL.

Emma Corstvet
The Accounting Review 1936 11(1), 49-63
The substance of this article is presented as a test of the hypothesis that inadequate bookkeeping is causally related to business failure. Lest the word causal result in the raising of eyebrows, the author hastens to explain that this word is used merely in the sense of an investigation into whether there exists a concomitant variation between adequacy of records and survival or non-survival in business. No study of business failures within the past five years has been complete without statistics on the proportion of bankrupt firms keeping adequate records of account and no lists of causes of bankruptcy has been complete without inadequate records as one. This is partly because it seems somehow meaningful, in a field so chaotic and so theoretically undeveloped, to present all factors that come to mind and are countable. It is partly too, because the bankruptcy act sheds a legal significance upon the subject by asserting that the judge shall grant a discharge unless the bankrupt has failed to keep books of account, or records, from which his financial conditions and business transactions might be ascertained; unless the Court deems such failure or act to have been justified under all the circumstances of the case, an assertion which at present carries with it little more than formal legal consequences.