Abstract Financial accounting can be regarded as essentially a process of keeping historical records of financial stewardship. Since working capital is such an important matter, the records should be maintained and various statements prepared in a manner that will not obscure the movement of working capital funds. The calculation of periodic income is a secondary function. This viewpoint leads to what may be termed a source and application of funds concept or philosophy of financial accounting. It involves nothing essentially new except a shift of emphasis. Most of the current principles and practices can be regarded in this light. An unqualified adoption of this viewpoint suggests some modifications of current practice. Both the income statement and the balance sheet may be restated to emphasize the fund change, or fund flow, aspect of business undertakings. The source and application of funds statement itself gains in significance. The double entry bookkeeping process may be invested with a source-application meaning. Debits (apart from those made in the income summarizing process) can be interpreted as expressions of applications of funds, and credits (with the same qualification), as sources. It this is done, certain matters that are sometimes formally recorded would not be recognized in the accounts proper. The source-application of funds viewpoint narrows the gull between accounting for business organizations and for non-business undertakings, as well as for fiduciaries. Without adopting or accepting all of the possible variations of existing practice that have been suggested, the source and application of funds philosophy may be used as merely one measure or standard by which accounting principles and practices, existing and proposed, may be evaluated.

Abstract The author focuses attention on the peculiar aspects of the role of the accounting curriculum in the university, and in the professional school of business. The first characteristic that should be noted is the fact that much of the professional concentration in accounting is dominated by the focusing effects and the control exercised by preparation for the certified public accountants (CPA) examination. Another factor that needs to be noted as an important molding force, is the widespread importance exerted by opportunities in tax and government accounting, particularly for income tax purposes. The importance of the livelihood furnished by this work, together with other widespread opportunities for immediate employment by a wide range of employers, serve undoubtedly to attract many students as majors whose prime concern may be to select a field in which job opportunities are most plentiful. Many of these are not immediately interested in working for the CPA label, although this may become a basic interest later on for purposes of professional advancement.

Abstract An area of accounting that is subject to varying interpretations and inconsistencies in reasoning is the statement of source and application of funds used in reporting financial changes. Moreover, little effort has been made to iron out these shortcomings. The fact that this statement has always been relegated to a minor position in accounting use is apparently one reason why those who have worked with it have often been satisfied with their own ideas and have been unaware of or indifferent to the situation that exists. And, in reverse, it may well be that the inadequacy of theory in this area has prevented a wider use of the statement. In recent years there have been repeated predictions that the funds statement will play a more important role in the future and such a trend seems to be taking place in current financial reporting. If the statement is destined to greater usage, now is the time to crystallize further the thinking about it. To illustrate an important difference of concept, the reader is asked the question whether or not funds are involved in a transaction in which a plant is acquired by the issuance of securities without cash or other current assets being transferred.

Abstract The article presents information about moneyflows in social accounting. The economy has suffered in the past from business depressions and unemployment and in spite of the present high level of business activity there is no reason to think depressions have been eliminated. If one looks beyond the immediate situation, unemployment is still the most important economic problem. Because one lives in a money economy where moneyflows play an important role in organizing economic activity, a better understanding of moneyflows should help one towards a better understanding of the problem of maintaining reasonably full employment. Moneyflows arise out of transactions. Because they arise out of transactions they are recorded in accounts to the extent that the transactors involved keep books. Because they arise out of transactions, too, over-all estimates of the money flows in the economy lend themselves to presentation in financial statement form. Such a form of presentation has the great advantage of organizing the component moneyflow estimates into a systematic picture, a picture that brings out a number of equalities between debit totals and credit totals. These equalities facilitate the process of making statistical estimates of moneyflows.

Abstract In February 1948, upon the request of Ben D. Wood, Director of the College Testing Program of the American Institute of Accountants, its President appointed a Test Advisory Committee of this association. The committee was created to work with the Committee on the Selection of Personnel of the American Institute in the preparation of new tests and to act as adviser upon such matters as the Institute committee might place before it. In the article, the author discusses briefly the effects of any national, regional, or wide-range testing program on accounting education, for the purpose of the present discussion, a mythical program. Certain it is that at present people have neither educational nor instructional equality in several institutions, and certain it is that they should pause to restudy methods. Accounting in theory and in practice has grown by leaps and bounds, but much of the educational method has not kept pace with it and people must look forward to more coordination and less variability in their instruction. A testing program, worthy of the name is one means toward the end people should be seeking.

Abstract The article presents comments of the author on an article by scholar Gordon W. Stead. The article by Stead is an interesting analysis of accounting ideology accompanied by a preliminary charting of idea interrelations. At the top of the chart stands integrity. It is the author's intention to show how the successive aspects of doctrine derive from this one fundamental concept, it being his view that this dependency is the direction of causation. It will be no detraction from his constructive contribution to the development of the concept of an integrated body of accounting thought to try here for a supplementary pattern one leaning toward a line of discussion he avoids when he chooses to show that rules of conduct derive from immutable principles. In this supplementary pattern it will be the view that principles may have been slowly distilled out of actions. This view would help to express the idea that accounting rules having first been fruits of tentative actions, grew in significance until they became guides to pre-determined actions. As these accounting actions grew increasingly diverse and complex, so did the attendant rules, customs, practices.

Abstract The primary case for the uniform achievement tests of the American Institute's Committee on Selection of Personnel has been argued in these columns. A secondary use to which they may be put has been developed at the University of Michigan and may well find useful adoption elsewhere. One of the most difficult judgments which a college admissions officer, or department head, is called upon to make is the evaluation of credits brought in by students transferring after one or more years at some other college. There is always a human desire to be as generous as possible, for the sake of the transferee as well as for reasons of inter school policy. This desire must be balanced by the need to protect the school's own. reputation when it is staked upon the eventual graduate. The fundamental welfare of the transferee himself as well as the welfare of the advanced. classes into which he will go also demands the accurate appraisal of his achievement to date. The problem is especially pressing in subjects such as accounting where each course in the "accounting major" sequence so directly relies upon the mastery of the accounting courses which have preceded it.

Abstract The article presents case studies in internal auditing. The following qualifications appear to be those most needed by an internal auditor; first, he must be an experienced accountant. Many graduates of good accounting and business courses in schools and universities want to step at once into the internal audit department. The recent graduate will do better in the long run by first obtaining considerable experience in clerical, accounting, and operating positions. This seems especially true when thinking of a job like internal auditing, which deals mostly with the things that go wrong, not with those that go right. Second, only a man who can think quickly on the spot and is willing to make decisions on his own will ever be a good internal auditor. Persistence and patience are other necessary qualifications. Finally, the utmost ability to be tactful, diplomatic and personable is needed. An auditor spends much of his time interviewing and questioning all kinds of people. He must get results without antagonizing, and without saying one word that might be harmful to himself, his department, or his company.