Knowledge that Transforms

Reviews the book "Elementary Accounting," by George H. Newlove, Leo C. Haynes and John A. White.

Reviews the book "The Income Structure of the United States," by Maurice Leven.

Reviews the book "Money and Banking 1931-38," vol. 1, "Monetary Review," and vol. 2, "Commercial and Central Banks."

Abstract The past decade has witnessed a new emphasis on accounting principles and practices. This added emphasis has resulted in a critical re-analysis of our principles, and a revaluation of many of our practices. Of the many factors which contributed to bring about this change, two seem basic: changing price levels and technological changes. The first raises, in a new light, the problems of valuation; the second raises the problem of writing off assets which are physically usable but economically useless. Both of these factors, obviously, operate to qualify profit and loss statements and balance sheets. The differences between surplus changes and profits to surplus, as determined above, are not a result of the profits or deficits carried to surplus. Such changes, which are not accounted for by profits or deficits to surplus, however, do qualify reported profits or losses. These changes might be related to total profits or losses before fixed charges, before cash dividends, or as was done in this study, to profits or losses carried to surplus after fixed charges and cash dividends.

Abstract The article attempts to stimulate a more systematic method of evolving standard, but evolutionary, rules of accounting. The conclusion follows from two premises. First, rules of accounting have become, in large measure rules of law. Second, that the present methods by which accounting theory is translated into the accounting rules or, if one chooses, into accounting practices, which thus enter the legal system, are not wholly satisfactory, especially in view of the results which now follow from that translation. By consequence, the task of developing a systematic yet flexible means of arriving at and recording the sound doctrine as it appears in the light of the knowledge of the day, takes the foreground as a major problem in the profession of accounting. Economist John Bauer, indicated that accounting development had paralleled, roughly, the enormous growth of business over the past half-century; and he concluded by insisting, also accurately, that the growing control of government over business furnished a powerful spur toward extending the best private practice to all business units in similar fields.

Abstract From September 19-24, 1938, occurred the Fifth International Congress on Accounting in Berlin, Germany, which brought together German accountants and trustees, and representatives from appropriately forty foreign nations. This convention was again the occasion for discussions on the real status of the accounting profession within the new national pattern. To indicate the position of the German accountant is the object of this paper. The last five years have brought an abrupt about-face in political, cultural, social, economic and professional Thinking in Germany. No phase of national life has remained untouched. Because the efforts and endeavors of every individual are first to serve the welfare of all the people, the education of the individual to the ideology of National Socialism is a most necessary prerequisite. While alignment to the new pattern was accomplished very quickly in many fields, the professional occupations remained aloof from the new mode of thought; but now, with the aid of legal and educational forces, they, too, are following the trend. Among the professions, the accountant, whether private or public, has always occupied an honorable and important position.

Reviews the book "Municipal Accounting--Accounting Principles and Procedure," by Charles H. Langer.

Abstract While accountants have classified surplus in various ways, usually with special emphasis on its sources and legal availability for dividends, a classification based on the financial functions of surplus seems important as a basis for studying its administration by corporate executives. Corporate surplus and dividend policy is essentially a problem of finance, and analysis of the problem might well be predicated upon financial functions of the surplus. Fundamentally, surplus serves three if financial purposes, a source of expansion capital, a buffer for business risk, a basis of dividend distribution. Its use as a primary source of capital for expansion has depended, of course, on the retention of earnings in business and is evidenced strongly by the history of many American industrial enterprises. Corporate growth by retention of earnings has the merit of avoiding both the perils of bonded debt, and the accumulation of cumbersome and embarrassing contingent claims on earnings through preferred stock.

Abstract There is probably no field of accounting in which a greater opportunity for missionary work exists. The field of governmental accounting has received as little recognition as any, but the education of those who will keep the records cannot go far until those who arc to install and audit the records understand the proper procedures to follow. The governmental units have a larger dollar volume than any other industry but there is probably no industry in which less adequate accounting systems may be found. The increasing scope of public business in municipal, state, and Federal governments should be recognized. The accountant will be looked to as the one who can meet this situation, but if his training has included nothing on this special problem he will not be ready. It may be that the failure to give more importance to governmental accounting is attributable to the lack of a widespread offering in colleges and universities comparable to other accounting subjects. Education for the aspiring accountant should not be measured by what is available, but by the value and need of certain fields of study. The courses offered should fit the need of the student and not the desire of the school.

Reviews two books. "Mathematics of Business and Finance," and "Selected Tables for Business and Financial Calculations," by William S. Schlauch and Theodore Lang.