A study of authorities in the U.S. and Great Britain leaves much to be desired as regards the exact procedure to be followed in incorporating the results of foreign branch transactions on the books of the home office. It is evident that several variants in procedure are possible. The simplest arrangement for recording branch and home office relationships is the use of one account current in each record The home office Branch Current account will show in domestic currency the amount of the home office investment in the branch and the Home Office Current account in the branch ledger will show the home office proprietorship or residual liability of the branch to the home office stated in foreign currency. The credit balance in the Home Office Current account represents net assets whose various debit balances may have arisen under various exchange conditions and been converted into terms of domestic currency at various rates. Substitution of the balance of the Branch Current account for the balance of the Home Office Current account would be easier and more effective than conversion of the balance of the latter account.

The article focuses on the differential cost that occurs when the manufacturer changes the quantity of its production. A manufacturer may wholly or partly avoid spoiling the market by selling his increments in output abroad, or by appealing to a different domestic market from the one in which he has been disposing of his goods. According to some theories if additional production results in lower prices for all units, true differential cost must include the loss resulting from such price reduction. Since differential costs are anticipated costs, they do not enter into the accounts. The author in this article considers the theory which underlies differential costs. A brief outline of practical procedure suitable for the accumulation of available factual data is presented, including suggestions as to how statistical forecasts of costs at various anticipated levels of production can be made. Various assumptions are sometimes made relative to cost trends at stated levels of future production. One such assumption is that differential costs will be less with each increased level of production until full capacity production is reached.

Perhaps no topic has been the subject of such wide differences of opinion as the method used, under given conditions, to make allowance for the expense which results from the disappearance of value of physical assets, commonly termed depreciation. These methods vary from those which result in a minimum charge to those which result in a maximum charge for any given period. Absolute uniformity in this respect is neither attainable nor desirable. Allowance must always be made for natural differences arising from geographical location, climate, and the character of the asset in question. Neither can the differences of opinion of individuals be entirely erased. Depreciation will long continue to be a controversial subject. By recognised opinion, however, much that is erroneous or dangerous may be eliminated from the list of proposed procedures. Methods which may be condemned are those which, if persisted in, result in financial embarrassment or bankruptcy as well as in gross inequality in treatment of the various parties interested in the progress of the enterprise.