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Robert Capettini, Richard A. Grimlund, Howard R. Toole, Comment: The Unique, Real Internal Rate of Return, The Journal of Financial and Quantitative Analysis, Vol. 14, No. 5 (Dec., 1979), pp. 1091-1094

Roy L. Crum, Darwin D. Klingman, Lee A. Tavis, Implementation of Large-Scale Financial Planning Models: Solution Efficient Transformations, The Journal of Financial and Quantitative Analysis, Vol. 14, No. 1 (Mar., 1979), pp. 137-152

I. Introduction, 163—II. The model, 163.—III. Empirical results, 164.

The article presents a reply by the author of an article related to human resource accounting information to the comments made by Professor of accounting, Doug Snowball. According to the author, Snowball's first DC concern is the use of student subjects. He asserts that student subjects often have participated previously in laboratory experiments and, thus, are likely to view them as games in which their task is to determine the true purpose of the experiment. The subjects' knowledge of the experimental purpose then may cause them to give biased responses to contribute to the "success" of the study. The above reasoning is unsound in relation to business laboratory experiments. In the discipline of psychology, student subjects may have had frequent prior exposure to laboratory experiments because of the large number of experiments conducted. Prior exposure to business laboratory experiments is unlikely because relatively few laboratory experiments have been conducted.

The article focuses on the role and function of the "intermediate" course in the accounting curriculum. According to the author, an acceleration in the issuance by standard-setting bodies of highly specific and definitive accounting pronouncements has burdened intermediate textbooks and intermediate courses with what has come to be called legal accounting. The issue of what to do about "intermediate" accounting is confounded by discord over the relative weights to be assigned in the accounting curriculum to preparing students to pass the Uniform Certified Public Accountants Examination and preparing students for longer-term assignments in the profession. Accounting teachers have placed almost the entire burden of conveying the contents of the most controversial accounting pronouncements on the intermediate course that precious little time remains for acquainting students with a theory of the field which they are about to enter. One reaction to this predicament has been to expand intermediate from three semester hours to four, or from one course to two.

An exposition of the principles of division, nomenclature, and definition is undertaken, as synthesized from other disciplines such as logic, biology and social science. Applying these principles to the credit side of a balance sheet it becomes clear that the existing basis of classification for the credit side and its coordinate subdivisions is deficient. The concept of equity does not provide a basis for articulating categories that are exhaustive and mutually exclusive. The rationale explaining these categories is contradictory, internally inconsistent and invalid. A proposal is made for a new basis of classification. It is based upon a pervasive characteristic possessed by all items on the credit side of a balance sheet; they represent sources of capital invested in recorded assets. Sources of capital are in turn, demarcated into transitory and standing sources.