Methodological Background, 69. — The Method, 72. — The Indexes of Correlation, 76. — Omitted Variables, 77. — Inadequate Data, 87. — Independent Variables Intercorrelated, 88. — Joint Curvilinear Correlation, 92. — Joint Correlation Using Flexible Methods, 96. — Conclusions, 105.

Many accountants appear to have no very definite notion of what a balance sheet is. Forthright opinions on the subject are rare; by inference, however, two main trends of thought may be distinguished, one of which is based on the capital-value or property concept and the other on the investment or amount-of-money-advanced concept. The former is exemplified by the so-called fundamental equation: Assets minus liabilities equal net worth. Numerous remarks on the subject of accounting valuations clearly show that their authors were guided at least temporarily by the idea that a balance sheet is or ought to be a statement of the worth of the business. This comment applies to all who would write up good will not purchased or who hold that, if purchased, it need not be amortized until it is actually worth less than it cost. That patents need not be amortized, because they are, in time, supplanted by good will, and that if a company's stock is quoted at a discount, its balance sheet must be inflated, are further samples of the same trend of thought.

Introduction, 393.— I. “Land ownership,” 394.— II. Tenancy and mortgage indebtedness, 396.— III. Share croppers, 398; leases to relatives, 399.—IV. Farm laborers, 402.—V. The “agricultural ladder,” 407.— VI. Analysis by decades, 411.— VII. Analysis by regions and groups, 413.—VIII. Growth 1930–35, 416.—IX. Descent of the “ladder,” 417.— X. Character of our tenancy, 421.— XI. Conclusions, 423.

It has been the author's observation that first-year accounting students have considerable difficulty in learning how to make calculations for the admission of a partner by investment. The calculations for goodwill or for bonus, and the journalizing of the results seem to contain somewhat more than ordinary difficulty. The method presented in the article is simple, yet it is reasonably complete. It sets forth the five possible cases in concrete form, permitting the student to realize that the whole procedure is actually easy. The process contains certain logical steps that aid the student in tasking and retaining it. In order to simplify the process for the sake of teaching it, the thought and expression "ignoring goodwill" is substituted for the ordinary conception and terra "bonus." It seems easier to build upon the idea of either recording or ignoring goodwill than to include the additional notion of bonus. After the subject has been discussed, the fact that the ignoring of good will means giving a bonus in ownership to someone can be made clear in one statement to the class.