Knowledge that Transforms

Reviews the book "Analysis of Railroad Operations," by Joseph L. White.

The provides information about the monthly magazine "The American Accountant" published by Homer S. Pace. Many of those interested in accounting have long felt that insufficient expression is being given in books and magazines to the undertakings and the problems of the commercial and industrial accountant as distinguished from those of the accountant engaged in professional practice. Most accounting literature, and particularly the periodicals in the field, have been prepared primarily by and for those with either an academic or a professional attitude toward the subject. Their contributions to the science of accountancy have been notable ones, but in them stress has been laid on many points with which the accountant in business is not particularly concerned, while on the other hand many of the most vital and pressing problems of the accountant engaged in executive and operating work have received scant attention. Therefore a warm welcome seems assured for "The American Accountant," a new monthly magazine sponsored by Homer S. Pace, long known as a leader in accounting study, education and practice. The new magazine is designed for all those doing accounting work of any sort, and it aims to discuss accounting problems of all types, not merely those incident to professional practice.

Reviews the book "How to Read a Profit and Loss Statement," by Herbert G. Stockwell.

Reviews the book "Introduction to Actuarial Science," by Harry Anson Finney.

Abstract The decision regarding the proper position of any subject in a curriculum is dependent upon the purpose for which the latter has been established, that is, the end which it has in view. Modern collegiate schools of business are not in agreement regarding this matter and some do not appear to have any clearly defined objective. Under these conditions it is obvious that different decisions will be made regarding the place and amount of instruction in a given subject. It may be accepted that the rapid recent growth of schools of business has been due to two causes. One is social and emphasizes the importance of the public or social aspects and effects of business organization and activity. The other influence is private in nature and represents a demand for improvement in business administration for the purpose of private profit. While both of these have been influential it is clear that the curricula will be different according as the social effect or the private acquisitive goal has been the primary or paramount consideration.

Abstract Probably no task confronting the instructor is more irksome or trying than that of grading papers; yet it constitutes a very important part of his work, and to a certain extent determines his success as a teacher. The objectives in the grading of papers, problems, and books may be summed up as follows, rating a student's work; pointing out errors and seeing that they are not repeated; and finding students weaknesses. The purpose of the article is to present a suggestion that have been helpful in dealing with the second and third points. It has often been laborious to write out all the corrections on a paper, and, in a good many cases, not effective when it is done, because many students do not look at papers which are returned, especially when they have passing grades on them. The form following provides a means of making a large number of corrections and suggestions with the minimum of effort, and in such a way that the student is almost forced to take cognizance of them. The form need not be confined to first year students, as the principles apply throughout the accounting courses, and with some changes and additions can be readily adapted to advanced work.

Reviews the book "Income Tax Procedure," by Robert H. Montgomery.

Abstract Public utilities have given rise to many knotty problems, and much comment has been heard, pro and con, as to the reasonableness of their income and expenses. A public utility is commonly thought of as a natural monopoly, but a regulated one, which does not settle its own rates. It is under the jurisdiction of the various regulatory commissions which are found in all states with the exception of Delaware and Kentucky. These commissions are supposed to set the utility rates at that point which will yield a reasonable rate of return on "fair value," plus enough to cover operating expense., but the more or less familiar discussions and decisions as to what "fair value" and a reasonable rate of return are, and the methods of determining them, will be passed by here. Instead, it is proposed that the gross, net operating, and net income of the utilities be examined in their relation to some of the other values and costs, and that some of the major operating expenses be subjected to a survey as to what they include, their reasonableness, and their relation to total operating expenses.

Reviews the book "Foreign Exchange Accounting," by Christian Djorup.

Abstract The article discusses the relationship of selling expenses and other distribution costs to the problem of inventory value. It has been viewed that cost affects the supply prices of commodities, particularly in the long run, but the effective cost even in this connection may be found only in the case of a limited number of marginal producers. However, in the case of the representative enterprise it is true that market price is normally sufficient to cover all of the expenses of operation, including the so-called distribution costs, and something by way of a profit margin as well. The present practice of charging distribution costs directly into operating expenses without passing them through the regular cost system and thus into inventory values, is doubtless based in part on the assumption that such costs are not subject to inventory because they occur simultaneously with the sale or after the sale has taken place. The conventional idea of accountants that in no case can certain classes of charges which enter into business operation unmistakably but in ways unobservable by physical methods be set up as deferred items is subject to revision.