Knowledge that Transforms

Reviews the book "North Pacific Fisheries, With Special Reference to Alaska Salmon," by Homer E. Gregory and Kathleen Barnes.

Reviews the book "Time and Labor Saving Ideas in Accounting Procedures," edited by P.S. Seidman.

The article presents accounting case of Gimbel Brothers Inc. Recent financial statements of Gimbel Brothers Inc. disclose several features of interest, which may be discussed under the three general headings of appreciation of fixed assets, handling of earnings of subsidiaries and a group of miscellaneous items of significance, several of them characteristic of a large retail merchandising establishment. The business of Gimbel Brothers, Inc. had its inception in Vincennes, Indiana, in 1842, but the present parent company was not incorporated until August 22, 1922, in the State of New York. The business is primarily of department-store character, including selling of a complete line of wearing apparel, dry goods, and house furnishings in conjunction with the operation of a number of restaurants and other service departments. Books of the corporation reflect two appraisals, both dating back to the early twenties. Immediately after incorporation in 1922, Gimbel Brothers Inc. acquired the net assets of two predecessor corporations and two subsidiary companies.

The article discusses several issues related to the training for the controllership. The approach has been that any discussion of training for controllership must start with a definition of objectives and a division of the problem into sections. Economists have been concerned here with training for the administrative, policy-making responsibilities of the controller and his immediate assistants. Various methods of training have been recognized but a combination of formal academic work with an organized apprenticeship program has been accepted as the most promising. To apprenticeship has been left the task of developing facility and judgment in meeting particular situations. Upon the academic program has been placed the burden of developing depth of analytical thinking, breadth of background, and the proper point of view. For these reasons the emphasis in the academic work has been upon analysis and breadth. The impossibility of including all desirable topics in the curriculum was accepted and a program was developed which was divided into three parts, covering, (1) technical subjects, (2) general business courses, and (3) background work in economics and related subjects. The desirability of undertaking the program as graduate study was advanced.

Reviews the book "Mathematics of Accounting and Finance," by C.H. Langer and T.B. Gill.

The article focuses on accounting for appraisals. If accounting records have been properly established and maintained on the basis of original cost, appraisal values should not as a general rule be used for operating purposes. Any basis other than original cost reflects a condition of values at a particular time and subsequent price fluctuations might so alter the revaluation amounts that they would no more depict the present values at some future time than would the original cost figures. During periods of economic stress, many organizations are forced by conditions beyond their control to alter the principle in order to decrease their operating costs. Write-downs are necessary to account for price changes, extraordinary obsolescence and non-utility or abandonment of the property. Appraisals are made and adjustments accounting for the replacement values are recorded on books with the thought that the price level, at the time books are adjusted, will remain about the same for a long period of time.

The accounting system of the national government is similar in many respects to the systems maintained by various state and municipal governments. One of the primary functions of accounting is to present clearly and promptly all the facts that are essential and necessary to good judgment and efficient administrative action. Municipal accounting is comparable in many ways to commercial accounting, yet the terminology is frequently different, and it is for this reason that municipal and governmental accounting seems rather difficult to the accountant who has not specialized in one of these technical fields. It can be said that Federal accounting presents no more difficulties than commercial accounting. According to the author, the budgetary accounts are separate and distinct from the accounts known as proprietary accounts. Budgetary accounts being in the nature of controlling accounts, whereas proprietary accounts disclose detailed information relative to assets, liabilities, revenues, and expenditures.

On August 27, 1919, the Phillips-Jones Corp. was incorporated in New York, succeeding Phillips-Jones Co. Inc., which had been organized in 1914. The business, dating back to 1887, consists of the manufacture and sale of fabrics, men's shirts, Van Heusen Co. collars, pajamas, and underwear. An examination of the financial statements of the corporation for the past few years reveals a striking transformation in surplus, from a substantial earned surplus and no capital surplus to an even more substantial deficit and a large capital surplus. The marked transition, which occurred in 1938, can be traced through the Statement of Profit and Loss and Deficit for the year ended December 31, 1938. The special charges and adjustments included an inventory adjustment of $326,041.17 arising from a change in the valuation of inventories whereby the basis of the lower of cost or market, was adopted. Another adjustment was necessitated by a change in policy as of December 31, 1938, whereby the outstanding stock of five subcontracting companies was transferred to the Phillips-Jones Corp., and the notes of these companies for which the stock had been held as collateral were canceled.

Reviews the book "Secretarial Accounting," by J.F. Sherwood and Clem Boling.

The profession of accountancy holds a place of honor in England, ranking with the ministry, medicine and the law. Its traditions have been built up over years of practice and they display a general air of austerity and conservatism. The English accountant should be viewed in relation to the activities of his profession, and in relation to the economic and social aspects of his country. To a marked degree his effectiveness is conditioned by existent legal and financial philosophies. Although the profession of accountancy in England is inextricably bound up with the various Companies Acts it is of interest to note that practicing accountants actually preceded their enactment. English economists and accountants constantly refer in their writings to the separation of ownership from control of company property and the necessity for an accounting to be rendered to the real owners of limited liability companies yet English law appears to be behind social and economic change as it does not, to any important degree, reflect this separation and its implications. The incorporated accountants are generally in favor of English Company Law reform particularly with reference to the profit-and-loss and holding company accounts.