The article highlights that the nature of the income report has never been set forth clearly by accountants but there seems to be an assumption that its basic nature is that of a report on certain of the activities of a business entity. In accordance with this view, the detailed presentation in the income statement of the expenses of the firm may be considered a procedure, which reveals the activities of the firm and to some degree, provides a basis for estimating the efficiency with which they were performed. However, this apparent endeavor of accountants to reveal activity has failed to provide for an itemization of those activities represented by the income of the firm. As a result, an investor, attempting to evaluate the activities of a firm by a study of income reports, might gather some information by an examination of the expenses of the firm but would remain largely uninformed as to how and in what manner the income was provided. It is the purpose of this paper to examine means and methods by which the nature of the source of the reported income of a firm may be revealed, as well as to review the nature of some of the expense items.

The interpretation phase of accounting has been receiving an increasing amount of attention in accounting literature in recent years. While it is true that supporting schedules have been advocated for special purposes, the presentation of interpretive data generally has been neglected. The purpose of this article is to examine the problem of developing and presenting such supplementary data for income reports. The nature of an income report must be that of an activity report in which are reflected, in varying degrees of detail, certain of the activities of a business entity. If the conception of the income report as a presentation of data on the activities of a firm is accepted, it is necessary as a part of the underlying analysis of business reporting to establish an agreement on the nature of an activity in the accounting sense, for the term "activity" is an arbitrary term. The inevitable conclusion falls that accountants must provide supplementary data to facilitate estimations of activities under different concepts of income. But there are additional types of supplementary data, which should be provided.

Reviews the book "Accounting Principles," by Howard S. Noble.

Consider the proposition that the doctrine of consistency may be overused, misunderstood, misapplied, ill-defined, and not conducive to the development of accounting research. The special committee on Cooperations with Stock Exchanges of the American Institute of Accountants and the Committee on Stock List of the New York Stock Exchange concluded that effective accounting reports required consistency in the application of the methods of accounting from year to year. Possibly the best way to examine the doctrine of consistency is to ask why an entity should apply an accounting method on a consistent basis. Broadly, there appear to be two approaches to the objective of reducing the role of the doctrine of consistency in accounting practice. First the objective may be approached by applying the scientific method in developing and selecting criteria to be used in guiding the use of accounting methods. The second approach toward the objective of reducing the role of the doctrine of consistency in accounting practice would be to insert multiple measures in accounting reports leaving to readers the task of selecting the measure appropriate for his needs.

A recapitulation of the highlights of this article embraces the following points: 1. Process is the dynamic, on-going, ever-changing, continuous phenomenon of events and their relationships. 2. The elements of the communication situation of accountancy are selected for purposes of analysis and discussion. 3. Communication in accountancy includes both content (observational dimension) and media (productional dimension) of communication. 4. Accountancy may be viewed as a function of communication process (organizing principle). 5. A schematic model of accountancy as a communication process serves as an effective means for describing and discussing the communication situation of accountancy. 6. The basic functions of the accountant (communicating unit) include: (a) receiving information about a firm's economic events; (b) interpreting the information; (c) selecting information to be communicated; (d) encoding the information as messages; (e) transmitting the encoded message(s) to the users of accounting statements (destination). 7. The basic functions of the users of accounting statements (destination) include: (a) interpreting accounting statements; (b) using the messages. 8. An assessment of the communication situation of accountancy raises several key questions which point toward concrete experimental problems. 9. The communication theory offers a basis for an integrated and clearly defined areas of research.

Whether determined from direct observation or from a study of authoritative statements, the present structure of accounting theory assumes an economic entity engaged in economic activities. The central purpose of accounting is to make possible the periodic matching of costs and revenues accomplishments. This concept is the nucleus of accounting theory and a benchmark that affords a fixed point of reference for accounting discussion. In the related area of behavioral relations this present core-function requires, at least in an implicit sense, the assumption that the external parties interested in accounting data are motivated to action primarily by the economic results reflected in the income reported by the business unit. In a similar manner acceptance of the present structure of accounting theory necessitates the corollary assumption that the parties who direct the activities of the business unit also are motivated primarily by the same economic results if for no other reason than the knowledge that their accomplishments will be evaluated in these terms.

Presents a tribute to William A. Paton, founder of `The Accounting Review' and was its first editor. Studies conducted on Paton; Paton's boyhood in Wisconsin; Educational attainment; Professional career.

Reviews the book "Creative and Innovative Management: Essays in Honor of George Kozmetsky," edited by A. Charnes and W.W. Cooper.

This article focuses on contributions of accounting professor Ananias Charles Littleton, who died on January 13, 1974, to the field of accounting thought and practice. The impact of Littleton's efforts on accounting thought is particularly noteworthy because of the time period spanned by his work and because of the influence of his early academic thinking on subsequent organized accounting thought. His contributions in the area of accounting education, theory, and practice were continuous from the time he returned to the University of Illinois in 1915 to begin a teaching career until the mid-1960s, well past his retirement in 1952. The son of a railroad worker, at the time of the industrial growth of the Midwest, in an area where livelihood centered around agriculture, he absorbed both the steadfastness and self-reliance of the farming community and the sense of progress accompanying the industrial growth. In 1933, Littleton published what has become a classic in the field of accounting history, a prodigious volume entitled "Accounting Evolution to 1900."

Reviews the book "The Efficiency of Business Enterprises," by Lloyd R. Amey.