Journal Article The Norm of a Closed Technology and the Straight-Down-the-Turnpike Theorem Get access S. G. Winter, Jr. S. G. Winter, Jr. The Rand Corporation, Santa Monica, California Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 34, Issue 1, January 1967, Pages 67–84, https://doi.org/10.2307/2296571 Published: 01 January 1967
This article focuses on various limitations suffered be the discipline of accounting. This discipline suffers in many ways from the inability to devise, deduce, or build a general theory on which to base the many necessary lesser theories for specific events, operations, organizations, etc. Until this general theory is produced we will continue to operate with the variety of theories which cannot be interrelated or fitted to any one framework of accounting in a logical fashion. This article is an attempt to open the door far enough to permit a little light to be thrown on these matters in the hope that we might proceed a step further towards a general theory of accounting. Over the years two main concepts, the proprietary concept and the entity concept, have been discussed and there have been occasional appearances of refinements, modifications, and alternatives reflecting slight variations in viewpoint. Those who hold the proprietary concept perceive the firm as being owned by a sole proprietor, a set of partners, or a number of shareholders. The entity concept, like the proprietary concept, is a viewpoint, an attitude of mind and it, too, is not confined to accountants.
This article focuses on the role of programmed instruction in managerial accounting course. The rate of experimentation and introduction of new techniques in the field of education has not been very spectacular. With programmed instruction in particular, most of the potential remains to be exploited. In school the students are not required to take more than one accounting course. In order, therefore, to cram more material in a one-semester course without arousing the wrath of the students, one has to find ways of reorganizing the material and presenting it in a more efficient way. The students feel that they somehow do not understand the purpose of education and especially the purpose of the required curriculum that teachers force upon them. Our educational system rests on the notion of integrated programs of study. The people who design curricula attempt to look at the total requirements toward a goal (the degree) and then proceed toward the description of specifications which will enable the student to reach it.
The article examines various aspects of the concept of replacement value accounting. Replacement value theory is a particular measurement concept employed in ascertaining what constitutes that maintenance of a capital for the entire entity. Income is the residual that exists after capital is maintained in that sense dictated by this special measurement concept. In some cases it is possible that the capital to be maintained is measured in terms of current replacement costs. Historical cost accounting and the general or specific price level adjustments to it are restricted in the amount of their charges against revenue to the historical or price-level adjusted historical costs of those assets which the entity presently holds. In order to provide a detailed contrast with the price-level adjustments, it is necessary to leave the conceptual level of replacement-value accounting. However, whenever the individual-asset-and-liability-levels are selected for the purposes of brief comparisons, certain simplifying assumptions are required.
For purposes of exposition and application, a linear programming formulation of the planning process was postulated. Recent application of the proposed approach indicates that this is a feasible approach to generation of control information. And, in fact, the application's results are highly encouraging. First, important deficiencies in the traditional accounting system were observed. Since this traditional model is not an opportunity cost system per se, the most it can be expected to do is to signal the existence of opportunities. In the period analyzed it did signal the existence of deviations although their source and effect were obscured. A second, and more subjective result, is that application has given every indication that this type of approach is indeed feasible (which should not be confused with an assertion that it is desirable from a cost and value viewpoint). Consequently, it is appropriate to suggest that additional research be done in an effort to examine such issues as the extent to which accounting variances should be aggregated, given a specific decision model, or the extent to which decisions made in response to certain deviations should be considered in the accounting system.