Knowledge that Transforms

The article focuses on professional examinations in accounting. Problems on accounting were prepared by the Board of Examiners of the American Institute of Accountants and were presented as the first half of the C.P.A. Examination in accounting practice on May 9, 1956. The candidates were required to solve problem one and any three of the remaining four problems. The total weight assigned to this section of the examination was 50 points and the suggested time allowances were as follows: problem one, 80 to 110 minutes; any three of the remaining four problems 120 to 160 minutes. The first question is about computing the tax payable by a company. The minimum federal income tax liability by the regular method and by the alternative method is to be calculated. Another question is about a company which has resulted in loss in two consecutive years. The company provides a reserve on its books by charges to income for the losses of its subsidiary. The profits shown above for the company are before provision for amortization of the excess cost of acquisition and for the losses of its subsidiary. The students are required to prepare a worksheet for use in a consolidated balance sheet.

Reviews the book "Measuring Business Changes," by Richard M. Synder.

Reviews the book "Medieval Trade in the Mediterranean World," by Robert S. Lopez and Irving W. Raymond.

Reviews the book "Standard Handbook for Accountants."

Reviews the book "Depreciation," by Eugene L. Grant and Paul T. Norton.

The author presents a bibliography on computers and accounting systems. It is divided into three sections dealing with equipment design and construction, system investigation and equipment application and system analysis, appraisal and revision, respectively. Each section is divided into two parts which are the books and articles sections. He mentions the authors of books or articles focusing on subjects like general surveys of computers and how they work, system analysis toward introduction of computers and accounting systems, among others. In each section, the author has listed the books and articles dealing with individual subject matters under each heading. "Design for a Brain," by William Ross and "Electronic Computers for the Businessman," by John M. Carroll have been listed under the first section. "Electronics in Business," by Herbert F. Klingman and "General Accounting in a Public Utility," by J.W. Balet have been listed under system investigation and equipment application. "Economics of the Digital Computer," by Richard F. Clippinger has been listed under system analysis, appraisal and revision.

So there may be no misunderstanding of my thesis, I have (1) used the term "capital fund" to indicate the total net capital or resources available for the operation of a business; (2) segregated this "capital fund" into its two component funds, namely "working capital fund" and "fixed capital fund"; (3) stated, therefore, that "capital funding" ordinarily occurs only from net profits and the addition of new capital; (4) held that the internal operations of a business frequently involve the conversion of working capital into fixed capital and vice-versa; that these should be called "conversion funding" because they do not affect the "capital fund," but (5) that all of these funding operations be aptly described in the Application of Funds Statement, so that the reader may clearly see how they affect working capital; finally, that the term "non-funding operations" is misleading and incorrect because these are clearly operations between the two component funds which make up the total capital fund of a business; they are funding operations, hence the term "conversion funding" is recommended.

This article attempts, by use of the published data, to summarize and analyze the United States Steel Corp.'s reporting of goodwill and associated elements during these eventful years. In addition to pointing out an interesting chapter in American corporate reporting, the summary perhaps directs attention to the importance of sound valuations for contributed resources and the desirability of systematic accounting for goodwill. The United States Steel Corp., as is well known, was organized by a syndicate headed by J. Pierpont Morgan. In consolidating a number of existing companies, the syndicate issued none of the bonds or shares of the new corporation for cash alone. Although the preferred and common shares were issued in amounts which resulted in a large quantity of stock discount, the legal status of the shares was materially improved by withholding from the financial statements any evidence of this discount. Apparently for this reason the beginning balance of the "Property Account" was determined residually after the assignment of par value to the securities issued and appropriate values to assets other than those included in the property account.

The author discusses management and industrial accounting in Western Europe and the differences between European and American businessmen. He discusses the social backgrounds of both businesses mentioning that the United States impress Europeans with its superior organization of industry. He highlights the fact that the American wage rates are higher than any of the European countries by comparing wage rates and systems of taxation. He evaluates the performance of European managers, while considering the lack of adequate incentive in delegating authority or creating a middle level management to make decisions. While discussing the shortcomings of the European industry in relation to industrial accounting, he points out that the engineer tends to be the man running the European industry, and in the function of forecasting and budget planning the engineer tends to think first of production and next of selling that production. He discusses the role of budget planning and standard cost accounting in Europe and the status of business schools as affecting European industry.

The article focuses on electronic data processing in the accounting curriculum. The author mentions that growing development in the field of electronic computers and their potential use in processing business and accounting data has prompted course offering in this area. He enumerates the content that should be included in a university-level course in the area of accounting. He brings into consideration the programming of a system which includes planning, systems analysis, flow charting, coding and the other functions necessary to integrate the new system into business. He discusses the question of whether an electronic computer is necessary to teach a course or not, stating that it is necessary for elementary courses in data processing. Questions pertaining to the requisites for courses, the department which should offer system courses and the text material to be used in such courses and the availability of instructors in data processing and the training necessary for prospective instructors have been examined.