Reviews the book "Business Loans of American Commercial Banks," by Benjamin H. Beckhart.

The cost accountant visiting Europe and England today is struck by the tremendous revival in industrial production that is taking place. Along with this a highly competitive worldwide situation is developing, resulting in a keen interest in any procedure that will increase efficiency. There is an increasing interest in the evolution of accounting procedures. Accountants are interested in improvements that are taking place in other countries as well as in developing ideas of their own. England is faced in particular with a highly competitive international situation. There is, therefore, a lively interest in anything that will improve industrial efficiency. As a result there is to a greater extent than elsewhere a desire to uncover new avenues of improvement in accounting procedures among educators and practicing accountants, and to upgrade the standards of education of the accounting profession including industrial accounting. Accountants and educators are discussing much the same topics as American accountants and educators, and here is brought out an interesting study in semantics.

The purpose of this article is to describe the U.S. War Department account classification and to show the use made of each element of the code, as of July 1947. It must be remembered that the War Department comprises only one component of the U.S. government and, consequently, must necessarily follow accounting procedures prescribed by the U.S. Bureau of the Budget and the U.S. Treasury Department. At the same time it must prepare its accounts to suit the eagle eye of the U.S. General Accounting Office which is to audit the accounts of the approximately twelve hundred army disbursing officers. Consequently, War Department account classification is a result of normal federal procedure plus additions required by operating conditions within the department. The complete classification explained in this article is designed to provide a basis for budgeting, accounting and reporting, designating accountability and responsibility, and exercising managerial control over finances. Each transaction of the U.S. government is related to some one fund of which there are three major categories, namely, the general fund, special funds and trust funds.

This article focuses on the recent accounting publications by the U.S. Government. Some of the published books are "Municipal Budget Procedure and Budgetary Accounting," "Work Measurement in the City of Los Angeles Building and Safety Departments," "Governmental Cost Accounting in the Los Angeles Area" and "Cost Accounting and Work Measurement in the Federal Government." Most of the text is devoted to a discussion of budgeting for the general fund. However, budgeting for the other usual municipal funds is treated briefly with a three page discussion being given to capital budgeting in the first book. General fund budgeting is presented in the traditional three phases, namely, preparation, adoption, and execution. In the three chapters devoted to budget preparation the importance of the work program as being the basis of expenditure estimates is well brought out. A model work program is presented in the appendix. Most works on budgeting recommend the "accrual basis." Others advocate the "cash basis." This bulletin not only describes detailed procedures under both of the traditional bases but presents a very practical method of budgeting revenues on a "cash basis" and expenditures on an "accrual basis."

Reviews the book "Municipal and Governmental Accounting," by Carl H. Chatters and Irving Tenner.

A number of texts and reference books on accounting were examined for the purpose of learning the correct method of computing the value of a nonparticipating life-insurance policy, for presentation on the balance sheet of a going concern. Most of the books examined omitted all mention of the subject. In the five books that mentioned it, four different methods were recommended. In the case which the author had under consideration, the four methods produced four different answers. The variation between the high and low answers was substantial. A study of the four recommended methods convinced the author of this paper that the variations were not due to differences of opinion on the relative merits of the various methods, but to several causes. One is that accuracy has not been earnestly sought. The proper valuation of life-insurance policies owned is relatively unimportant, because the asset value is not large, and a misstatement does not seriously distort the balance sheet. Another cause is that a life-insurance policy is a unique combination of investment and expense. Accounting principles applicable to investments and accounting principles applicable to expense are alike involved in determining the asset value.

The article discusses about a message that was delivered during a speech by the president of American Institute of Accountants W.H. West. According to West, the Institute must be, of necessity, and of its on volition, interested in the work that peoples are doing for among the fundamental purposes of the Institution are two, the advancement of the science of accountancy and the development and improvement of education in accountancy. The extent to which people are living up to this desire is another matter. In this committee they have a very definite and good working contact with the Association. West is also proud about the library that the accountants have in their possession. It is not very easy for the man who is not in the City of New York to avail himself the library of the Institute. The Committee on Endowment, who administer the affairs of the library have given instructions to librarians to acquire every publication, every book, every pamphlet, every article that is written on accountancy or related subjects and place them on the shelves so that they might be available. This means that with the system of indexing by subject, author, publication, etc. the matters are readily able to find anything that is published which one might ask for.

The accrual method of accounting is commonly accepted as the most scientific and accurate method of handling accounts. Yet, in spite of this fact, a great many banks fail to realize the significance of the accrual principle. The accrual system is also especially valuable in affording an excellent check for the bank, and particularly so where the auditor or comptroller at the central bank wants to supervise the operations in the various departments of the main office and branch banks. This is the result of the fact that accruals must sooner or later be paid off in cash. At the same time, an accrual system that it is worth while to operate must be simple enough in application to be readily understood by the average bank clerk, comprehensive enough to cover all of the various operations in the banking business, and, most important of all, accurate enough to constitute an actual audit and control of the income and expense accounts. A satisfactory accrual system cannot be constructed overnight, but involves intensive and detailed study. It must not only provide for the accounting of accruals, but must also guard against undue duplication.