Abstract The great problem in the administration of the cost-plus contract program is the prevention of inflated and unnecessary costs. The fact that the government guarantees to reimburse the contractor for all necessary costs of performing the contract and in addition to pay a fixed fee, has often resulted in a let-down on the part of the contractor of his guard against high costs. It is the purpose of this article to draw attention to the merits and disadvantages of the cost-plus contract and to consider what devices and means can be used to make this type of contract function more efficiently as a method of producing goods. The production of goods under a cost-plus contract bears a similarity to monopolistic production, since the free market is abolished and all costs are recovered from the government. If the cost-plus program, therefore, is to become a vital and successful part of the American economic system, ways and means must be found for injecting efficiency into this type of production.

Abstract The principal concepts of the orthodox theory of proprietorship are rather vague and few of its assumptions valid under modern conditions. Much of these concepts and assumptions as resting on legalistic ideology of ownership, debt, etc., however, are unnecessary as they are undefendable. The proprietorship theory seems to be more plausible when it rests on an ownership point of view consistently applied in the analysis of business transactions and in defining cost and income. A narrow concept of owner or proprietor, however, is adapted only to the needs of calculating proprietary income and capital. It is not consistent with the more vital functions, in connection with managerial analysis, which accounting is coming to fulfill. A concept of proprietor broadly defined as the totality of private interests or the long-term investors as a class would be more logical and workable from the standpoint of theory and practice. The adoption of such a broad point of view, together with the abandon merit of any sharp distinction between proprietorship and creditorship on the basis of legal or economic ownership, no doubt changes the whole complexion and content of the orthodox theory of proprietorship; and it may be questioned whether it may still be called a proprietorship theory.

Abstract The article discusses various aspects of cost inspection in the U.S. Navy. The writer has made a number of appointments of college graduates who have had training in accounting, but have had limited or almost no experience. These have, of course, been in the lower grades under civil-service classifications. The results produced by such appointees have been extremely gratifying. In the opinion of the writer, there is neither a basis nor justification for any adverse criticism or reservation concerning the adequacy of the training, the capacity, the devotion to duty, the loyalty, or the general adaptability of these appointees. It is believed that many employers of college graduates who insist upon the "top ten or fifteen per cent" of a senior class are overlooking many fine opportunities for obtaining capable, loyal, and efficient workers. It must not be overlooked, however, that the excellent results observed in the experiences mentioned above may be attributed in part to a capable and trained technical principal accountant and accountant, thus affording excellent supervision and direction of the less experienced personnel.

Introduction, 507. — State acts modeled on the National Act: fundamental provisions, 508; peculiar details, 510; jurisdiction, 512. — Operation of the boards under these acts: Utah, 513; Massachusetts, 514; Pennsylvania, 517; New York, 518; Wisconsin, 525; Rhode Island, 532. — The acts of 1938 and 1939 and the amendments of 1939: the change of trend, 532; Oregon, 534; Michigan, 536; Minnesota, 538; Pennsylvania, 542; Wisconsin, 545. — Conclusions, 556.

Abstract Education for a career in accountancy, then, as in all education, has the objective of preparing individuals to act in certain ways with understanding. It, too, is a union of teaching and learning, combined in differing proportions. A complete education will take more time than an incomplete education. An in- complete education can be accomplished with a minimum of formal teaching; a more complete preparation usually leans heavily upon the vicarious processes of learning. Accounting is used in the social interest as an instrument of regulation of business; uniform systems of accounts and reports have been required in some cases; audits may have been prescribed; professional accountants are examined and licensed; accounting provisions are increasing in corporation laws. Such an appreciation approach would seem to be a very appropriate one in many educational situations. Yet this approach is seldom found among the college offerings. Intensely specialized programs of study undoubtedly have a place. Classes after hours and correspondence courses often serve a very useful purpose in this connection. But intensive specialization works under very definite limitations. If used to supplement prior general education, some disadvantage may appear because prior and present subject matter are not well interwoven.

Abstract Objective examinations in accounting are a subject on which a good many people seem to have very definite and adverse, opinions. Perhaps the objective examination is usually thought of as consisting of a more or less formal list of true-or-false questions; and when the material of an accounting course does not seem to be particularly well adapted to this type of question, the conclusion is easily reached that the objective examination has little place in accounting. The object of this paper is, among other things, to suggest some of the possible forms that the objective examination in accounting may take in order to cure the difficulties of the true-or-false question. It may be that with adequate variety in the testing devices the objective examination may appear feasible as a testing device, if not positively desirable. An objective test in accounting has been defined as a test designed to cover a large amount of material, to have a large number of questions requiring very brief answers, the answers to each unit being the same for every student who answers the questions correctly.

Abstract If the reserve is established as a percentage of receivables it makes little difference how a bad-debt recovery is treated as a credit to the reserve account or as a credit to an income account. A balance sheet at the end of a period would not be affected by a choice in the method of treating a recovery during the period. To the extent that a recovery is credited to the reserve account during the period the usual addition to the reserve at the end of the period will be less. The final balances in the accounts for outstanding receivables and the reserve will not be affected by a choice in the method of recording recoveries. Furthermore, net profit would be the same in either case. In one case a larger bad debt expense would be exactly offset by the income of bad debt recoveries. If the reserve is on a budgetary basis, increased by a percentage of sales, the question of bow to treat a recovery becomes pertinent because the balance sheet and net profit will be affected by the decision. A credit to the reserve account is conservative but theoretically the answer to the question will depend on how the percentage was determined.

Abstract The Dominion Companies Act of 1934, amended in 1935, and the English Companies Act of 1929 have many sections, which are identical or almost identical, and this is particularly true of the sections that deal with the audit of accounts. Both acts require that the accounts of companies granted limited liability shall be audited by an auditor or auditors appointed annually by the shareholders in general meeting; that the auditor shall report to the shareholders; and that a copy of the balance sheet, profit and loss account, and auditor's report shall be sent to shareholders before their annual general meeting. In practice, of course, the management chooses the auditor, and the board of directors has the power to fill vacancies during the year in the office of auditor, but no change in the auditor can otherwise be made without notice being given in advance to the auditor and to the shareholders of intention to propose a change. The auditor is entitled to attend any meeting of shareholders at which the audited accounts are to be discussed.