Knowledge that Transforms

Reviews the book "Operating Results of Department and Specialty Stores in 1938," by Malcolm P. McNair.

Reviews the book "Advanced Accounting Problems," by E.L.Kohler.

Reviews the book "Life Insurance," by John H.Magee.

Reviews the book "Accounting for Economic Management," by D.S. Blacklock.

Reviews the books "Elementary Accounting," by George Hillis Newlove, Leo Cecil Haynes and John Arch White and "Intermediate Accounting," by George Hillis Newlove, C.Aubrey Smith and John Arch White.

Abstract The report of the Committee on Auditing Procedure of the American Institute of Accountants has been revised. The changes have to do with the alteration of the proposed procedures relating to receivables and inventories, whereby physical tests and verification by correspondence have been cut down to practically the same level as called for by previous practice. It might not be unexpected, following the McKesson and Robbins disclosures, that accountants, seeking protection, should amplify their responsibilities in an unnatural degree and reach a somewhat hysterical conclusion from which time alone would have made them recede. The professional criticism was that participating in inventory counts might give the accountant the appearance of appraiser; that tests, fully as acceptable as circularization, are available for determining the existence and propriety of receivables. Except for inserting the reference to a detailed audit, the changes were textual and the same remarks can be applied to the new certificate. The certificate is defective in that it is designed to protect the accountant rather than to give information to those who rely on the information which financial statements are supposed to reveal.

Reviews two books on taxation procedures. "The LaSalle Manual of Federal Income Tax Procedure" and "Prentice-Hall Tax Diary and Manual for 1939."

Abstract The article presents problems related to accounting students, presented at the second half of the examination in accounting theory and practice prepared by the Board of Examiners of the American Institute of Accountants. The first problem focuses on the issue of property transfer after the death of a certain person who has left his company and shares for her sole beneficiary. The court administering the estate of her deceased husband ordered her certain offers, to pay in full indebtness of his deceased husband's company, to submit to the court at its next session a charge and discharge statement. This company has sold certain amount of its shares, pursuant to appropriate resolution of its stockholders and directors, paid its debts and credited its shareholders with their proportion of the net worth. The company had been in existence for a period of five years but paid no preferred dividends so that an amount of $1,600,000 was in arrears. It has been asked to prepare a balance sheet, after giving effect to the recapitalization plan. The examinee is told that the executrix has paid the preferred claims but he is left to decide for himself as to which claims are included in that category. In most states taxes, funeral expenses and legal services rendered for the estate are regarded as preferred claims and they were so regarded in the above solution.

Abstract Uses and trusts originated in England shortly after the Norman Conquest. From that time to 1535 there existed two classes of trusts in England, active and passive. Where A conveyed land to B for a period of years instructing B to apply the income of the land for the use of C an active trust was created. If A conveyed land to B who was to hold the land permanently for the benefit of C with no positive duties to be exercised by B a passive trust or use was created. The latter type was far more common than the former. It was used principally to avoid some of the burdens which fell upon the holder of the legal title. Under the feudal system the lord was entitled to a "relief," or payment of money, when land descended to an heir of full age; and to "aids" upon the marriage of a daughter of the lord, the knighting of his eldest son, or when the lord was held for ransom. By conveying the legal title to another and reserving the use to himself the tenant escaped such exactions. An attempt is here made to discuss the treatment of a few items of receipt and disbursement frequently omitted in the provisions of trust instruments. Despite the fact that all the statements made in this paper can be supported by legal authority, not all jurisdictions hold alike in similar circumstances. Furthermore, with changing social conditions, and changing personnel in courts and legislatures, the law of a particular jurisdiction may be quickly modified or completely revised.

Reviews the book "Business Mathematics," by I.L. Miller and C.H. Richardson.