Abstract This is an era of experimentation and exploration in accounting. It parallels and is a portion of the same process which has given rise to innovations and developments in the social science of economics. Accounting like its sister science economics has belatedly begun to recognize that although the solution to each problem in the economic scene is limited and bounded by action taken relative to the solution of large problems, nevertheless, great potentialities for increase in economic well-being are possible through objective, piece-meal attacks on problems concerning the economy's units of activity, i.e., problems of individual business entities. To accomplish the many objectives of modern accounting-provision of data for financial statements, control, and special decisions of management-the art and science of accounts must be made more flexible, must be broadened, and must be deepened to accept within its ken increasing responsibilities for analysis and interpretation. The inordinate emphasis that has been placed upon single-purpose accounts and principles relating to such accounts must be replaced by a more scientific attempt to utilize accounts constructed so as to be of varied usefulness. Financial accounting as a device leading to the preparation of a questionable income statement and a more questionable balance sheet had its heyday in the first half of the present century. Accounting as a tool which embraces techniques of the statistician, the objective experimentalism of the engineer, and the concepts of the economist has great potentialities for serving the forward-looking purposes of management and investors beset on every hand by change in the social and economic scene. To be of greatest assistance in the solution of problems of private and public enterprise, there is a need for a broadened concept of the role of the accountant and accounts.

Abstract This article focuses on the problem of fixed charges in cost accounting. Fixed costs may be defined as those costs which remain practically unchanged in total amount when physical volume of output is varied. Such costs are not controllable by management, for their total amount is independent of circumstances which can be altered by executive decision. Most of these costs are fixed only within a certain range of output and become variable when greater ranges occur. To control costs, management needs information concerning controllable costs: which costs are controllable, what these costs should have been and what they actually were, as well as why the variances occurred. To determine the adequacy of selling prices, management needs to know total costs and product variable costs. Total costs will provide information as to the over-all adequacy of selling pikes. Variable product costs will provide information as to the adequacy of selling prices of individual products and, provide a guide for minimum selling prices. Thus management is concerned with both fixed and variable costs.

Abstract This article focuses on the financial statements valuation. Where two alternative procedures each have compensating advantages and disadvantages, it is possible to design a procedure that will combine them so as to amalgamate their advantages and eliminate their undesirable features. Fortunately, such a process is possible in the conflict between historical costs and deferred costs concepts. Since each theory has its obvious merits, there is much to be said for preparing two separate sets of statements, with one set being predicated on historical costs and the other being based on the deferred cost concept. Or, single statements could be prepared with two distinct sets of values. Such a procedure would have the salutary effect of fuller reporting of accounting data, and a greater usefulness of such information. It would, of course, mean an increase in the cost of accounting services, but accounting has become such an important adjunct of commerce that additional costs for vital information should easily be justified. The need for a dual value statement is not an entirely new one, since the traditional "Statement of Affairs" really expresses this same basic thought. However, the development of other dual value statements has undoubtedly been inhibited because they represent a sharp departure from strict precedent, rather than because these statements are either inherently unsound or fundamentally undesirable. It is believed that a new approach is certainly needed, and that there is compelling evidence to justify it.

Abstract The traditional answer to the question of how much test checking is required is enough to satisfy the auditor. The profession, through its national organization, has attempted to make this answer more meaningful by adopting a tentative statement of auditing standards which places emphasis upon the auditor's training, his preliminary preparation for each engagement, his independence and so on. The auditor, even though conscientious, may become satisfied with his test sooner if there are other engagements pressing for his attention, if the client is worried about the fee and if he happens to be feeling ill on a particular day. Quite aside from the possibility of any adoption of standards by the profession in an organized capacity, each practitioner needs to have a tool, which he can depend upon. Such a tool would enable the auditor to apply the same standard of quality consistently or to make explicit and definite adjustments in it for differing circumstances. Such a tool is now available to the accounting profession. It is the sampling theory developed by statisticians and now widely used in the sciences. It consists basically of the calculation of probabilities.

Abstract The article discusses some of the basic assumptions underlying social accounting. The basic idea is simply that the social accounting data must be scrutinized thoroughly before the results of social accounting can be interpreted properly. If this is not done and social accounting data are taken at their face value, they are apt to be misused and misinterpreted because of incomplete awareness of their underlying assumptions. In social accounting, as in private accounting, one must make some initial decisions. Social Accounting, that is, a system of accounts for a community, has three main functions: to provide a running, historical record of the community's economic operations; to measure the efficiency with which the community's economy operates; to provide a periodic inventory. The basic assumption concerning goals of economic activity can thus range from recognizing none except sheer increase of capacity as measured by population and capital to recognizing several so that the flow of several categories of products is taken at their gross value.

Abstract This article focuses on the relationship of accountants and lawyers in Tax practice. The American Bar Association's committee on unauthorized practice of law first turned its attention to the activities of accountants in connection with tax matters about 1932. From that time there has been some reference to accountants in almost every annual report of the committee. The first meeting of representatives of the American Institute of Accountants and the American Bar Association took place in 1932. The principal question at issue at that time was whether certified public accountants should be permitted to continue to practice before the U.S. Board of Tax Appeals. In the spirit which these words exemplify it should be possible for the two professions of law and accounting to adjust any and all differences by friendly negotiation, provided that the most enlightened and objective minds in the two professions will address themselves to the task. Many of these minds will be found in the faculties of the law schools and the accounting faculties of the schools of business. The author believes that they have an opportunity to make a great contribution to an enduring solution of a problem which is of vital importance, not only to their own professions, but to the taxpayers of the nation and to the Federal government, which depends upon income taxes for so large a proportion of its revenues.

Reviews the book "Essentials of Cost Accounting," 2nd ed., by John G. Blocker.