The French Code de Commerce, a law promulgated in 1807, contains a striking instance of an official changing of usage in a matter of business terminology. In making legislative recognition of the business corporation, the framers of the code applied to the corporation, as its official designation, the term "société anonyme," which means anonymous society. In so doing they appropriated a term which hitherto had been employed both by laymen and by members of the legal profession to designate various types of informal associations of business men, not one of which at all resembled a corporation. These forms of association were, in fact, characterized by features which are diametrically the opposite of those which characterize the business corporation. Yet the change in the official meaning of the term, société anonyme was effected, and the new meaning has apparently entered into common usage on a permanent basis. One of the earliest forms of the société anonyme appeared as the association of persons who participated secretly in the farming of taxes. The tax farmer for a town, city or other district associated with himself several capitalists to participate in the profits or losses of the undertaking.

The principal effect of a corporation law on financial statements is in the presentation of the net worth accounts. This effect arises from the definitions, sometimes implied, of capital and surplus, and from prescribed methods of establishing, and of increasing or decreasing capital and surplus. It is essential that an accountant, properly to serve and protect the interests of his client, interpret for that client and for the public which relies on the client's financial statements, the effect produced by law on such statements. Only by making a study of the law of the states of incorporation and residence may he determine how the facts may be best displayed. Certain requirements of the Michigan and Delaware Corporation Acts with regard to the capital and surplus accounts of corporations are worthy of special note. By a study of certain sections, and by amplifying and clarifying, the accountant may display the facts in a manner which will more clearly inform clients on important matters, and enable them properly to chart their future course. The discussion in the article deals only with the net worth section of financial statements, such as the display of information showing changes in capital and surplus, and the effect on the balance sheet of a corporation by the purchase of its own capital stock.

Reviews the book "Want and Plenty," by Jacob H. Hollander.

Reviews the book "Planned Money," by Basil P. Blackett.

Reviews the book "Principles of Business Law," by Essel R. Dillavou and Charles G. Howard.

Reviews the book "The New York Money Market ," vol. 1, "Origin and Development," by Margaret G. Myers, vol. 2, "Sources and Movements of Funds," by Benjamin Haggott Beckhart and James G. Smith, vol. 3, "Uses of Funds," by Benjamin Haggott Beckhart and vol. 4, "External and Internal Relations," by Benjamin Haggott Beckhart, James G. Smith and William Adams Brown.

This article presents information on the financial and operating relationships. In order, to compare the statements of the average public utility with those of an industrial concern one should consider – Ratio of net worth to debt, number of times bond interest earned, Operating ratio, % of fluctuation in gross earnings, % of fluctuation of net income, ratio of net worth to fixed assets. The article also contains some questions related to financial relationships that help the student's to grasp and point out differences in different types of industry.

The article focuses on importance of clarity in balance sheet display. One of the most important pieces of work which a public accountant is called upon to perform is the preparation and analysis of balance sheets and financial conditions. By no means is this the mere listing of certain assets and liabilities. It resolves itself into a matter of judgment in arrangement and valuation, and judgment is often a matter of one's experience in judging and noting the results in previous situations. The matter of prime importance to consider is the type of person who will be called upon to read the balance sheet. In a recent examination, it was discovered that the management had been giving itself some systematize, but serious-minded kidding by working on the assumption that installment accounts receivable were not subject to the need forbad debt reserves. This is a matter of problem of valuation. According to the author, balance sheets must be prepared for the benefit of the reader and must be grouped to give him the benefit of the most accurate information available, in the most readable form. It should give him all of the facts and the facts should be stated clearly.