This article presents accounting questions that were prepared by the Board of Examiners of the American Institute of Accountants and were presented on May 14, 1947 as the first half of the certified public accountant examination in accounting practice. Candidates were allowed four and a half hours to solve two problems. Time limit for each question was also specified in the question paper. Problem 1 carried a weight of thirty points and problem 2 a weight of twenty points. The first question presents trial balances of a company and its subsidiary at December 31, 1945. From them and the other information given in the question, the examinees had to prepare a columnar consolidating work sheet showing in separate columns a consolidated balance-sheet and a consolidated income statement at December 31, 1945. For the second problem the examinees were asked to prepare a columnar worksheet of a company showing the postings of cash transactions, the adjustments, and the cash available for final distribution, a statement of loss on realization and expenses of liquidation and a statement showing the amount of cash to be distributed as a liquidating dividend to each stockholder.

During the wartime years and now during the reconversion period a number of arguments have been advanced that seem strange to accountants and to businessmen. Like the unicorn, deferred maintenance is sometimes said to exist only in the minds of highly imaginative individuals-individuals, it might be added, who are acutely motivated by a profit incentive. While the conclusion stated in this bald fashion without qualification is obviously extreme, businessmen have found themselves hard pressed to find convincing arguments. It is the purpose of this paper to examine the conditions necessary for the existence of deferred maintenance, to investigate the propriety of taking a deduction from income to cover this item in advance of the actual expenditure, and to offer criticisms of some prevailing methods of measuring such deductions. In the course of this work it is necessary to review the relationship of maintenance to methods of depreciation apportionment. From the economic viewpoint, the accountant by making periodic reductions of income for depreciation is attempting, perhaps crudely; to provide for capital consumption or utilization.

Reviews the book "Professional Ethics of Public Accounting," by John L. Carey.