Knowledge that Transforms

Reviews the book "The A B C of Accounting," by Stanley Edwin Howard.

Abstract This article focuses on the movement towards refinement of terminology of accounting. The attempt of leaders in the field to give exact definition to the various accounting terms is evidenced chiefly by the activity of the Terminology Department of American Institute of Accountants. Not infrequently there is encountered in accounting literature the thought that accounting, being an aspect of applied economics, should be cognizant of the dictates of economic theory and should attempt to portray the concepts of the economist. It is the intention of the present article first to display the economic concept of cost of production and to follow that with the accounting concept so that when they stand in contrast any similarities or dissimilarities may become apparent. The concept of cost is truly fundamental in economic analysis. In fact one author has gone so far as to state that the backbone of economic science is the balancing of value against cost. It appears at the outset that before proceeding further in a consideration of the role which cost plays in the economic scheme of things it would be well to pause and examine the nature of cost as conceived by the economist.

Abstract This article focuses on the relation of taxation to the history of the balance sheet. The census which was introduced by the Emperor Augustus at the time of the birth of Christ was of great importance, for it was intended to obtain a firm financial basis for expenses; consequently, it laid the foundation of a budget and the proportional distribution of taxes among those who were liable to pay. The first entries were made upon wooden boards coated with wax, which were put together in the shape of a book, originally being called "caudex" and after the introductions of parchment, "charta." The taxpayer had then to declare upon oath that he had made no false entries. Citizens shared political authority according to the amount of property declared and the Roman, therefore, kept not only exact accounts of their daily receipts and expenditures, but also exact statements of their property. The relation between balance sheet and taxation can best be explained by. an examination of the business books and tax returns of the great Florentin banking house of the Medici.

Abstract Accounting at the outset was concerned largely with the financial relations existing between a concern and its customers and creditors. Very soon, however, this narrow aspect of accounting was modified so that the accounts would record all assets and liabilities and make possible the construction of the balance sheet directly from the ledger. Then followed additional changes which permitted the presentation of a profit and loss statement. In all instances, however, the accountant was concerned largely with recording the historical changes in the financial and operating aspects of the business. Although some thought was given to the uses to which these statements might be put the primary consideration involved showing the chronological events from the point of view of what had happened and whether any irregularities were disclosed. Later when it became evident that accounting possessed an important relationship to management, the accounts and particularly the statements, were modified. Accrued and deferred items became recognized, with consequent changes in the balances of the income and expense accounts, so that the latter displayed incomes earned and expenses incurred by periods.

Abstract This article focuses on the recommendations by an accountants, in public practice on the definition on earned surplus. This accountant meant phraseology according to the evidence in his suggestions. It is probable that the majority of persons who have been observed misusing the word mean diction. An aberration on the part of every accountant whom have been heard using the term is the mispronunciation of amortize and amortization. It is said that the accent of the first word and the secondary accent of the second word are on the second syllable.

Reviews the book "The Control of Distribution Costs and Sales," by William B. Castenbols.

Reviews the book "Accounting Principles and Procedure," by Malcolm L. Goggin and Leslie Tonner.

Abstract Depreciation may be defined as that inevitable disappearance of the value of certain items of physical property which can normally be expected in the course of the conduct of business enterprises. The reason why the unit is no longer of value to the owner may be actual physical deterioration, or it may be that changes in demand for the product of a machine or technical improvements of one kind or another have made the unit obsolete. The accounting problem in connection with depreciation, is to record in some way the amount of depreciation which should be taken in each accounting period and this amount in turn may have to be spread over several products or services which were produced or were in process during the period. Much of the disagreement in the discussions of depreciation reserves has undoubtedly been partially caused by the use of only one reserve for depreciation for the entire property instead of one reserve for each type of property. A great deal of confusion concerning depreciation arises from the interpretation of the depreciation policy as a means of providing for or facilitating the making of replacements.

Reviews the book "Accounting for Executive Control," by Monard V. Hayes.

Reviews the book "Accountants Working Papers," by Leslie E. Palmer and William H. Bell.