Knowledge that Transforms

Reviews the book "Post-War Monetary Stabilization," by Gustav Cassel.

Reviews the book "Introduction to the Mathematical Theory of Finance," by C.H. Forsyth.

Reviews the book "Gano's Commercial Law."

Reviews the book "Principles of Business Law," by Essel R. Dillavou and Charles G. Howard.

Reviews the book "Manual of Pathfinder Accounting System for Municipalities."

Abstract The article focuses on the effect of business policy upon accounting and vice-versa. The most pressing problem facing large enterprises is the problem of controlling the organization through co-ordination, so as to achieve teamwork in executing a united program. Natural growth, consolidations, development of chain systems, and other influences have increased the size, complexity, and territorial dispersion of individual concerns and have created a situation out of which methods of managerial control arise from necessity. The growth of knowledge as to "best" ways of business operation has thrown into the spotlight the tendency of individuals to follow their own inadequate methods. Gains from adopting methods of "best" practice, together with the value of consistency of action within the fields set by sound organization, is rapidly forcing the deliberate adoption of company and departmental policies to establish control over objectives and operating methods. Departmental policies are concerned with procedures instead of objectives, are determined systematically if not scientifically and are changeable to cope with changing conditions or the increasing knowledge of principles of business practice

Abstract This article presents news related to universities in the U.S., as of September 1929. W.H. Rowe, assistant professor of finance and accounting at University of Akron, is leaving the department to enter the Division of Finance of the Bureau of Agricultural Economics at Washington. W.F. Smith, certified public accountant of Upleger and Co., who has been a lecturer in the department at Baylor University, is resigning his position and D. Hudson, cashier of the university, will assume this work. Professor M.S. Carroll has been continuing his graduate study at the University of Chicago this summer. Students majoring in accounting have organized a society to promote further interest in the subject of accounting. Associate professor at University of California C.C. Staehling will be on sabbatical leave to complete work on a book on partnerships and their accounting problems. Lewis Lilly, certified public accountant at McLaren and Goode, will assume some of professor Staehling's work. L.O. Foster, instructor in accounting at University of Illinois, goes to Western Reserve University as assistant professor of economics to take charge of the work in accounting.

Abstract This article focuses on the problem of whether every corporation should be compelled by law to publish detailed reports of internal affairs. The article considers the objections to this proposed legislation, makes some general observations on the problem, and draws conclusions from the survey conducted as of September 1929. Among the arguments in support of this proposed legislation a considerable amount of propaganda was encountered. Very convincing theories were put forth in some instances which upon close scrutiny proved wholly fallacious. The same deceptiveness will be found among the objections in a still greater degree. In fact a discussion of the objection is a grand expose of misleading arguments that have been broadcast by the defense in order to develop a strong public opinion against the proposed law. Salient among defense arguments stands the objection that a law which required publication of corporate affairs would be in violation of the private rights of corporations. The private business corporation, it is said, is a private concern just like a personal enterprise or partnership and the public is not justified in meddling in its affairs.

Abstract This article presents a fair illustration of how American accountants develop well defined accounting practices and ignore the underlying theory involved. The acceptance of the relative sales value theory of allocating costs is important because flew opportunities for its application are constantly appearing. If the warrants are detachable, they constitute a case like stock rights except for the fact that the relative sales values at date of issue cannot be used. If the first available and equitable sales values are used, it appears that the relative sales value theory should be used. The study of the use of relative sales values were as a basis of allocating costs by examining cases in which the application of this specific bit of accounting technique has been recommended by well-known accounting authorities. Unless there are reasons to the contrary, the selling price forms the best guide in attaching weights to be used as conversion factors when repricing a commodity after the grading process.

Abstract The article focuses on an interesting paradox pointed in a review by Henry Rand Hatfield, professor of accounting, which drew much attention. If two identical bonds are bought on the same day, one of them at 90 and one at 110, the aggregate cost is equal to the aggregate par and the yield rate on the holding is equal to the nominal rate on the bonds. Hatfield demonstrated that if the buyer separately amortizes the premium on one and the discount on the other by the conventional compound interest formula the aggregate interest earnings thus found in the several periods will diverge from the uniform coupon receipts. The author shows that the paradox can arise from the algebraic properties of the "average yield rate" or single compound interest rate implicit in the cost of an aggregate holding acquired in more than one purchase lot. The author also considers some of the properties of the mean yield rate and makes some comments on the meaning of bond premium and bond discount and puts some question about the theoretical accuracy and the consistency of Hatfield's accuracy.