Knowledge that Transforms

This article presents information on the graduates entering into the field of accounting. There has been an increasing trend of business graduates, who are pursuing their majors in accounting and attracted to public accounting. It has been indicated that there had been a definite downward trend in the quality of the students in the accounting curriculum. As an additional example of this viewing with alarm, undergo the rigors of the accounting curriculum. There are undoubtedly many reasons why schools of business do not attract more of the good students. Business does not have the same prestige, as do some of the professions, notably medicine, law, and engineering. The field of business covers a broad range of activities and accommodates persons of widely varying abilities, as contrasted with the more highly specialized sciences and professions. A committee of the school of business recently made a study of the quality of their incoming students and on the basis of their findings suggested the three objectives to the faculty--to strengthen the background preparation of high school students entering college, to attract a larger percentage of the better high school students, and to give the field of business administration greater prestige in high schools.

Report of the Commission on Standards of Education and Experience for Certified Public Accountants (C.P.A.) has at one fell swoop placed a frightening responsibility, a magnificent opportunity and a sweeping challenge before the U.S.'s accounting educators. This report, in recommending a shift from experience to education as the major element in securing the C.P.A. certificate, also states categorically "the formal educational preparation of candidates for the profession needs to be more thorough and comprehensive than is now provided by most educational institutions." It was suggested that schools of business must provide curricula which will equip young men and women for the world of their future as well as the world of today. This task will require a complete re-examination of the present educational program. Constant reappraisal of objectives will be necessary as a consequence of the drastic changes in prospect for business and for the U.S. economy. College administrators and faculties must be bold, resourceful, and imaginative. Action is required to develop a long-range program.

Reviews the book "Montgomery's Federal Taxes," by Philip Bardes, James J. Mahon, John McCullough and Mark E. Richardson.

This article focuses on non-linear depreciation in accounting. The depreciation of a physical asset is its decline in value by the action of deleterious or adverse factors. These generally are wear-and-tear, the elements, neglect, and so on, but may also include obsolescence and other nonphysical factors. The basic problem of accounting for depreciation is the selection of the systematic manner in which the cost of the asset is to be written off over its useful life. The value of the asset declines from its initial value at the beginning of its useful life to a terminal value at the end thereof. This terminal value may be either zero or a residual value commonly termed the scrap value. The problem is to state the residual or depreciated value of the asset at any selected point during its life. There are two general types of continuous functions available for depreciation computations, the rectilinear and the curvilinear. The facts of curvilinear depreciation will be formulated herein in such a manner that anyone desirous of utilizing such a scheme for the computation of depreciation need only substitute the basic data of the problem in a formula.

In the area of consolidated statements, as perhaps in no other, there is the danger that the student will place full reliance upon working papers, elimination patterns, and technical procedures as demonstrated in the classroom and textbook in achieving a set of answers. If the student simply applies mechanical techniques, without thinking of the consolidation framework set by the past or the frame-work to be provided for the future, he will be unable to offer any theoretical support for his conclusions and will not possess any real confidence in them. Even worse, if the student leaves the matter at this stage, be may feel that certain areas in accounting are beyond his grasp, and may thus develop a basic insecurity. The possibility of any such insecurity can be avoided by the careful presentation of this subject matter.

The article presents matters related to accounting for students of accounting. The students of today will be the practitioners of tomorrow. One of these is the trend toward a constantly increasing proportion of fixed to total costs. The article presents theory cases for undergraduate courses. After some examination, the writers have found a means of achieving, in part, some of these goals. In a two-hour undergraduate course called "Current Accounting Topics," an effort is made to give students something other than conventional text-book material and to encourage the discussion of matters of theory in a framework that differs from the usual problem-solving approach. The article also presents a simplified three variance technique. The basic concepts involved in calculating the three components that make up the difference between manufacturing expenses incurred and the amount that is charged to production under a standard cost system are difficult matters for most students of cost accounting. The article describes about helping accounting students to learn how to analyze a business transaction.

This article focuses on joint cost analysis as an aid to management. In this particular instance the joint costs of production are allocated between the joint products according to the value method. In the short run certain expenditures management, buildings and machine, etc. are fixed--their incurrence is compulsory whether or not economic activity is undertaken. On the other hand, there are some expenditures which, in the same period are variable with output. The inclusion of a proportion of fixed or overhead expenditures in short term cost calculations is merely an attempt to bring the long term into the short. The expediency of transferring resources from less to more profitable lines of economic activity is unquestionable. The difficulty which arises in this particular case is of deciding which is more profitable. This approach would indicate the more profitable of the two alternatives, but even though the purchase of the machine may appear more economic, a further consideration remains, namely, whether the resources released by discontinuing the special processing of product are sufficiently great to proceed with the planned scale of investment.

This article focuses on accounting in executive programs. Teaching of accounting in these management programs has required and will continue to require something of a redefinition of what it is that we are teaching and for what end. A partial solution to the problem of obtaining a balanced approach to the accounting segment of these programs seems to lie in the fact that management personnel bring real on-the-job experiences to the classroom. According to the author, much of the content of accounting can be effectively taught apart from marketing or personnel administration. But in a discussion of planning or control, accounting is only one of the many elements involved. Obtaining a working familiarity with accounting involves the absorption of a fairly substantial and reasonably well organized body of knowledge. The teaching of accounting should come from illustrations used in the marketing, production, and other areas. The author regards all accounting data as basically a reflection of a variety of business operations.

Reviews the book "Appraisal and Valuation Manual," by Maurice R. Scharff, Stuart F. Kosters, John L. Vaughan, Jr., Sigmund Rothschild, Myron L. Matthews, Larry Smith, Karl Van Leuven, Jr., Nelson E. Finch, Leon W. Ellwood and S.O. Kaylin.

The problem of the proper determination of stockholder income hinges upon the concept of the nature of the corporation. In the years that followed, the idea that the corporate form of enterprise constituted an artificial being, in itself apart from its constituent members, grew to a preponderant position not only in legal status, but in accounting and economic thought. If economic significance is measured in terms of total dollars of assets committed to corporate enterprise, the close or private corporation occupies a distinctly secondary position. It is rather the public or widely owned corporation with which we must concern ourselves. The relationship between the corporation and most individual stockholders is in the case of the public corporation only an indirect and ephemeral one. A few owners of concentrated stockholdings exert, as members of the board of directors, a direct influence on management; stockholding for most individuals, however, is just another form of investment. The corporation's financial independence is demonstrated by the fact that about two-thirds of corporate funds are derived from internal sources, undistributed profits, and depreciation and depletion reserves. Furthermore, individuals own not all stock. Corporations own stock of other corporations and often form complex networks of affiliation.