Knowledge that Transforms

Reviews the book "Basic Standard Costs," by Eric A. Camman.

Abstract Whereas the terminology of law or medicine is intended to serve primarily if not exclusively the members of those learned professions, the accountants' language must be understood by everybody who has occasion to refer to financial statements. Professional jargon is utterly out of place. Editors of accountants' dictionaries should have desired to make their publications as comprehensive as possible, including not only terms current in business life, but also miscellaneous additional information which might be useful to accountants and business men in general. British usage as well as all words used in their ordinary sense should be omitted or at most, listed with a reference to standard dictionaries. Commonly used terms, which differ from a defined term only by a self-explanatory adjective were also to he excluded. The terminology committee of the American Institute of Accountants has no higher goal than that negative recompense which, according to Dr. Johnson, is the only one that lexicographers can ever hope to attain, namely to escape reproach.

Reviews the book "The Federal Reserve Act: Its Origin and Problems," by J. Laurence Laughlin.

Reviews the book "Prices," by George F. Warren and Frank A. Pearson.

Abstract The article focuses on accountants and the securities act. The significance of the Securities Act of 1933 to the accounting profession can hardly be underestimated. The accounting officer as well as the independent certified public accountant see their public recognition greatly enhanced, but along with this welcome enhancement of standing comes a burden of responsibility that is truly appalling. The risk assumed by an accountant-officer or by a professional accountant, who signs the registration statement submitted to the Securities Commission of the Federal Trade Commission is quite out of proportion to the possible material benefits that may be derived from the service rendered. The Federal Securities Act is the response to demands of a wide majority of the nation. More effective protection of the investor was promised in the platform of the Democratic party as adopted in Chicago in 1932. A general criticism of the act would urge certain restrictions on the civil liabilities and on the other hand certain extensions to make the act a better instrument for the social control of new investments.

Abstract This article discusses the theories of market crisis and the depression of balance sheets. The period of deflation should be a means of testing scientific opinions regarding the balance sheet. The replacement costs are approved on the basis of establishing price policies that is considered on two viewpoints, depending upon the objectives desired - as to the price calculations, and as to operating results in the accounts. In respect of price calculations, the majority of theoretical economists recognize the correctness of the theory today, even by those who consider the acquisition cost as the only true and real cost factor in the accounting computation of operating results. The advocate of the cost price theory keeps as an asset the 500 units of merchandise, the balance sheet value of which has no bearing on this question of price calculation. A full consideration of the causes of the depression would make it clear that the sting of the present crisis is in no way decreased by merely applying economist Fritz Schmidt's economic theory and the use of index numbers to show the present financial condition of businesses. The application of Schmidt's theory would of course improve the accounting procedure and the preparation of financial statements, and would help to clear up the managerial and economic condition of businesses when inventories are high and changes in capital structure take place suddenly.

Reviews the book "Financing the Consumer," by Evans Clark.

Reviews the book "Operating Results of Department and Specialty Stores in 1932," by Carl N. Schmalz.

Abstract The article focuses on the planning of field work in accounting. One of the acute problems facing accounting departments in collegiate schools of business is that of bridging the gap between the work in the classroom and the accountant's activities in business. The field work plan for those students who wish to enter public accounting has been developed to establish a means whereby the students may gain some valuable experience before graduation. The plan which is described in these pages is the one which has been in successful operation at the Ohio State University for about six years. Being located adjacent to several cities of considerable size, it has been possible for the university to secure the cooperation of a sufficient number of public accounting firms to make the venture a success. Participation in the field work plan on the part of the students is not compulsory. The success of the venture would be jeopardized if it were to be made so. Only the better students are privileged to take part in the field work and even in these cases, it is purely optional.

Reviews the book "Performance of Department Stores: 1932," by Edgar H. Gault.