Knowledge that Transforms

Abstract It is recognized that the total cost of higher education, whether in institutions publicly or privately supported, must finally be a charge upon the financial resources of the people. It is probable that institutional incomes will continue to be reduced for some time to come. It is important, therefore, to study expenditures with the view to assuring high standards for those desiring a college education at a cost which they can afford to pay. There are two great areas of economy open to institutions of higher education. The first is in the field of institutional coordination on a regional or state wide basis. The second great area of economy is in institutional internal administration. Somehow you must bring judgment to bear on the problem in order to provide the educational opportunities best suited to the greatest numbers and at the lowest possible cost. The educational services of colleges and universities may include instruction, research, and public service. Instruction is commonly provided in all institutions.

Abstract The author of the article assumes that revaluation of a cost-of-replacement basis is in general quite as defensible as revaluation on a value-of-money basis and has, at bottom much the same line of justification. From a balance-sheet standpoint, there is not much to be said for revaluation on a cost-of-replacement basis of plant assets particularly specialized depreciable assets, even in a period of rapidly changing prices. The author states that balance sheet figures cannot be expected to show realizable values in the case of plant assets and as expressions of cost incurred. It is hard to see any advantage in current estimated costs over actual dollar costs for balance-sheet purposes. In fact a footnote or a careful reference to the changing situation is as valuable as the adjusted figures themselves. On the other hand, there is hardly any serious objection to the introduction of careful estimates of replacement costs in the balance sheet provided it is done, as is almost never the case, in a proper manner, and this should mean, among other things, that the extent of the adjustment is clearly displayed.

Reviews the book "The Financial Policy of Corporations," 3rd ed., by Arthur Stone Dewing.

Reviews the book "Economic Development in Modern Europe," by Clive Day.

Abstract The article focuses on the Clark Plan of retail accounting. In March, 1934, the Board of Directors of the National Retail Dry Goods Association voted favorably on the adoption of the Clark Plan, embodying what have been called radical changes in Retail Accounting. The plan as finally adopted is not as radical a departure from present methods as was the original plan proposed by a controller, Carlos B. Clark. While the Clark Plan is optional, every inducement will be made to have stores adopt it. Since the Clark Plan is thought by some to be a revolution in retail accounting, comparing in importance with the adoption of the retail inventory system some years ago, accountants and particularly teachers of accounting should be somewhat familiar with it. The following comments, while not an exhaustive treatment of the subject should serve to clear up some misconceptions and also to define some of the issues involved. The effect upon business generally of recent laws and administrative policies of the government at Washington D.C. has been far-reaching.

Reviews the book "What Everybody Wants to Know About Money," edited by G.D.H. Cole.

Reviews the book "The Economics of the Recovery Program," by Joseph A. Schumpeter.

Abstract This article discusses some current problems in administering the retail inventory method. The retail method was created to meet the inventory valuation problems of department and specialty, women's apparel, stores, which constitute a distinct type of trading enterprise with valuation problems quite different from those of manufacturers, public utilities, railroads, and other kinds of business organization, and even from those of some other types of retail concern. Department and specialty stores buy and sell merchandise, but for the most part do not compound or process merchandise. The retail inventory method involves the recording of beginning inventories and purchases at both cost and retail prices, the marking of prices on the goods at retail only, the recording of all price changes, the taking of inventories at retail prices only, and the reduction of inventory valuations to cost basis by use of the avenge mark-up percentage. The keeping of complete records, of course, implies that a book inventory may be arrived at any time.

Abstract There are, indeed, several transitional periods of a business failure, for a failure usually does not occur as quickly and unexpectedly as an accident may, but has generally passed through several stages. A failing business enterprise may be likened to that of an individual suffering from a minor illness which, if not properly remedied, may develop into a serious disease, perhaps death itself. The first stage, for a want of a better name, may be called, in a pathological sense, the period of incubation. At this point one or more unfavorable conditions are quietly or insidiously developing. The owner of the business may not be aware of them, just as an individual is often unaware of the presence of a certain disease slowly developing in his constitution. These deep seated, slow-acting causes may not be recognized now, but later on they will become apparent. The second step is the financially embarrassed stage. During the life of any normal business enterprise there may be one or more times when a firm urgently needs cash to meet its maturing obligations. The third stage, termed financial insolvency occurs when a concern is unable to procure much-needed funds to meet its maturing or pressing obligations. The fourth stage, known as total insolvency occurs when liabilities exceed physical assets.

Reviews the book "Henry P. Davison, a Biography," by Thomas W. Lamont.