Internal reporting serves as a case in point of the intimate senses in which accountancy is a function of organization theory. The traditional theory of organization has the effect of directing attention to but one of the purposes of internal reporting, the asking of Score-Card Questions, and this at great cost to cooperative effort. An unorthodox theory of organization does not suffer from the same liabilities to the same degree. Of particular significance, this unorthodox theory of organization facilitates asking Attention-Directing Questions and Problem-Solving Questions that must receive a growing proportion of the attention of the accountant engaged in internal reporting, and this if only because electronic data processing will increasingly eliminate much of the accounting time heretofore devoted to Score-Card Questions. It seems appropriate that organization theory receive considerable attention by members of the accounting profession, which is presently in the throes of rethinking its scope and methods. For an inappropriate organization structure can frustrate the most worthy of intentions and, in any case, any fundamental changes in accountancy will require changes in the traditional theory of organization.

The article presents questions which appeared in the May, 1964, Uniform Certified Public Accountants (CPA) Examination. It was held on Friday, May 15, from 1:30 p.m. to 5:00 p.m. There were seven questions in all. The article also presents solution to the problems given in the question paper. Answers which follow are intended to typify those submitted by well-prepared candidates writing within the time limits prescribed. They do not necessarily include all elements for which credit might be given by the Advisory Grading Service of the American Institute of CPA or by the various state accountancy boards charged with the responsibility of issuing CPA certificates. One of the questions was related to expenditure. The candidates were asked to distinguish between capital expenditures and revenue expenditures, and their treatments in the accounts. They were also asked to distinguish between these two categories of expenditures and between their treatments in the accounts. The candidates were to discuss the impact on both present and future balance sheets and income statements.

The article presents information about the unit cost denominator in process costing. It informs that equivalent production is generally defined as the number of units that would have been produced had all of the dollars and effort that were expended during the current period been used in producing whole, good units. The understanding of process cost problems is facilitated when the solution is approached through a periodic inventory approach. First, the dollars to be accounted for are determined; then, the dollars remaining in the final inventory are traced, and the balance of dollars are associated with the transferred out units. The problem is to determine the unit cost of the goods remaining in the final inventory. Basing a solution upon a periodic approach does not imply that the dollars of transferred out units cannot be reconciled. With numerous cost concepts demanded of the students, the difficulties are minimized when all impacts are visualized through the costing of the final inventory.

In the near future students enrolled in elementary accounting may be taught either in classes composed of a large number of students which may be staffed by professional and experienced teachers or in small classes conducted by graduate students or part-time teachers. The number of accounting teachers is not increasing at the same rate as the increase in the number of students enrolled in accounting classes. Schools which either do not have graduate programs which attract graduate students competent to teach elementary accounting or do not have an adequate number of professors may need to use large sections. Large sections of elementary accounting may help solve budget problems in hiring and retaining competent teachers. A school may be able to pay excellent salaries to a staff of limited size by using large classes for only a few sections of elementary accounting. Another reason for using large classes is to enable persuasive and dynamic teachers to recruit able students to major in accounting and study in the college of business. Still another reason for large classes is to aid in teacher and faculty development.

The article presents some questions of theory accounts. The theory of accounts portion of the November 1963, Uniform Certified Public Accountants (CPA) examination was given on November 8, 1963. Suggested time allotments for questions are given in the article. Answers, which follow are intended to typify those submitted by well-prepared candidates writing within the time limits prescribed. They do not necessarily include all elements for which credit might be given by the Advisory Grading Service of the American Institute of CPA or by the various state accountancy boards charged with responsibility of issuing CPA certificates. In first section, all questions are compulsory. In the appropriate space on the separate answer sheet, candidates are required to blacken the space of the letter of the answer choice that best completes each statement. Candidates should use the special electrographic pencil for marking the answer sheet. Candidate has to mark only one answer for each numbered statement.