The article focuses on "quipu," a record-keeping device used by the Inca Indians, one of the more interesting old civilizations in the Western Hemisphere. Incas provide one with another fascinating story of the development of accounting. The modern accountant, surrounded with his electronic equipment, needs the perspective provided by an awareness of the simple tools used by record-keepers of the past. The present is often much more meaningful when one understands the past. The presence of electronic equipment especially is more thought provoking when considered in the light of the quipu, a simple Incan counting device of knotted strings widely used less than five hundred years ago. The knot record consisted of a main cord to which were attached knotted pendent cords. Knots on the hanging strings recorded, for example, the number of people in a village or the inventory in a storehouse. On these pendent cords, knots would be made, and these knots represented different numbers, their value depending mostly upon their distance from the main cord.

A market economy is characterized by a high degree of individual freedom over a wide range of economic activities. Individuals, the implementers of such activity, are, within a broad framework of legal and social constraints, free, singly or in consort, to enter or exit from enterprises of their choice. Further, they are largely free to distribute the resources they possess among alternative employments. Yet, because these resources are scarce and often versatile, any attempt to maximize their long- run contribution to society involves an allocation problem. Each resource holder making decisions regarding the timing and the employment of each resource held effectuates the allocation task. To achieve rational decisions it is reasonable to assume that the individual resource holder will have need for the factual data necessary to delineate and evaluate various alternatives. Commonly, in the case of capital, the resource allocation procedure will pass through several stages with the final step being the selection of an investment opportunity by individuals acting collectively.

The article presents an approach to capital budgeting that involves formal recognition of the fact that future cash flows are not known with certainty. The uncertainty is incorporated in the analysis by the utilization of probability theory. The approach referred to as the probability approach to capital budgeting. For purposes of describing the probability approach to capital budgeting the net present value of an investment will be used as a measure of the worth of the investment. If an investor wishes to use the rate-of-return approach instead of the net present value approach, the essentials of the probability approach to capital budgeting would be the same. In order to understand the probability approach to capital budgeting, one must be familiar with certain concepts from probability theory. A probability beliefs approach has been suggested in connection with the portfolio selection problem and could be adapted to the capital budgeting problem. Another approach might be suitable in certain cases that would involve the use of historical data.

The article informs that profit motive has frequently been described as the "driving force" of capitalistic society, and some of the more ardent supporters of this belief hold the profit motive in the same high esteem as their most sacred beliefs. The profit motive is assumed to be the implicit expression of society's goal for the firm. Further more, the profit motive is ascribed as being the objective of enterprise management, and this objective is assumed to be explicitly stated by the stockholders for the corporate management. The changes in the socio-economic environment, since the concept of a profit motive was first advanced, do not mean, analogously, that the profit motive is no longer a reasonable assumption regarding corporate management's goal. This paper re-examines the "profit motive" in modem society and relates the "modified profit motive" assumption to accounting practice. Thus, the paper consists of two parts. The first part describes, compares, and contrasts three viewpoints on how the motivational assumption for accounting theory can be re-interpreted in the current socioeconomic environment. The second part suggests specific extensions, from the foregoing analysis, to accounting practice.

Introduction, 420. — I. The general framework, 422. — II. The use of weather information, 425. — III. The making of forecasts: optimal information structures, 431. — IV. Other problems of cost, 436.

I. Introduction, 158. — II. The survey, 159. — III. Findings and interpretation, 160. — IV. Summary and conclusions, 163.

George H. Sorter, Selwyn W. Becker, T. R. Archibald, W. Beaver, Corporate Personality As Reflected in Accounting Decisions: Some Preliminary Findings, Journal of Accounting Research, Vol. 2, No. 2 (Autumn, 1964), pp. 183-196