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PROFITS AND SURPLUS AVAILABLE FOR DIVIDENDS.

Perry Mason
The Accounting Review 1932 7(1), 61-66
A more complete survey of legal opinion on the subject of corporate dividends indicates that while certain judges may be incompletely trained in the theory of accounts, there are few instances in which a clearly presented problem, upon the solution of which accountants themselves could agree, would be decided in a way which would violate the accounting principles involved in the case. Many of the apparently meaningless and erroneous statements are merely dicta, and much of the difficulty is due to a misuse of accounting terms rather than a confusion of ideas. Nevertheless, in order to avoid ambiguity and misunderstanding, it must be clearly understood that the terms "profit" and "surplus" do not refer to a fund of available cash waiting to be spent, that there is no relationship between profits or surplus and any particular asset so that an overdraft at the bank and the existence of a large surplus are not incompatible, that profits are usually "invested" before they are even determined, that surplus cannot be reduced by paying debts or purchasing assets, or, in other words, that profits and surplus are merely terms which refer to the excess of assets in general over the sum of the formal capital stock and the liabilities to outside creditors.

CONVENTION REPORT.

The Accounting Review 1932 7(1), 75-79
The sixteenth annual convention of the American Association of University Instructors in Accounting was held in the Raleigh Hotel, in Washington D.C. on December 28 and 29, 1931. President R.A. Stevenson, University of Minnesota will be presiding the convention. Subjects in the discussion included budgets and problems of budgetary control, accounting research, law and accounting and problems of accounting instruction. The annual dinner meeting was held on December 28, at 7:00 P.M. At the close of the dinner, the question of a change of name of the Association was discussed. Following proposed amendments to the constitution had been mailed out to the membership more than thirty days before the meeting: 'It was proposed to amend Article I to read as follows: "The name of this organization shall be The American Accounting Association." 2. It was also proposed to amend paragraph (c) of Article II to read as follows: "To develop media for the discussion of accounting subjects, including the publication, solely for educational purposes and without profit to any member or to the Association of a magazine to be called The Accounting Review."