Knowledge that Transforms

Reviews the book "Company Investigations of Automatic Data Processing," by Peter B. Laubach.

Students of accounting commonly have trouble with the so-called "goodwill method" of recording the admission of a new partner into a firm. Under this method, wherein the recorded capital equity of the old partners is not to be reduced and the credit to the new partner can be no less than his investment, there are the two problems of calculating the amount of goodwill to be recorded, and determining which partner or partners' capital accounts are to be credited when the goodwill is recorded. The determination of the amount of goodwill involved is approached by first calculating two amounts, both called recorded capital. The amount of goodwill involved is determined by subtracting what is termed invested capital from the larger of the two amounts of calculated recorded capital. Invested capital is the sum of the existing partners' capital equities before any adjustment for goodwill plus the contribution of the new partner. In presenting the material, the instructor must keep in mind that the students are not accounting majors. Further, he must remember that the students have enrolled in order to gain some practical knowledge. Due to the subject matter the course is difficult. Its usefulness, however, makes it a very popular elective.

Reviews the book "Elementary Accounting Techniques," by Frank J. Devlin, Francis J. McGurr and Robert S. More.

The two terms, microaccounting and macroaccounting, are created mainly for the purpose of recognizing the extent of the progress of accounting today. The term macroaccounting has the advantage over others in identifying explicitly the area to which accounting is applied. Macroaccounting is still expanding and the discussion of its six major branches in this paper is by no means exhaustive. Macroaccounting may be studied at two levels, business macroaccounting and economic macroaccounting. It is obvious that in this paper efforts have mostly been devoted to the former. Eventually, a set of conventions, assumptions, and standards for macroaccounting will be developed as in microaccounting. It is also suggested that most of the principles and standards of microaccounting may be applied to macroaccounting with modifications and additions. In examining the various branches of macroaccounting, one must note that the development of a national balance sheet has lagged behind in a manner that tends to cripple the entire system of macroaccounting. Another major task is to integrate the several branches of macroaccounting regarding classifications of accounts and systems of recording transactions. Only in this way can the full usefulness of macro- accounting be reached. The problem of the valuation basis is a complex one. No single method can answer all the questions. No matter what valuation bases are selected, the principles of consistency and comparability should be strictly observed. The need for offering macroaccounting courses in accounting departments was also suggested.

In this article, the author evaluates the faculty services with respect to the problems involved in awarding tenure and approval of promotion in rank. He mentions the criteria for promotion, appointment, tenure and salaries of faculty members for universities, liberal art colleges and technical schools. He describes a permanent tenure as the most important part of his professional life and details the standards of judgment used in making the decision of awarding a permanent tenure or not. He describes the steps involved in the evaluation process and the difficulties included in this comparison. He further mentions that examination by committees called impartial juries is one of the best ways of comparison. He discusses the shortcomings in the suggestion that promotion should be decided on the basis of the confidence an administrator has in the department and heads of departments. He finally mentions that there should be a considerable amount of integration between the promotion, tenure decision, salary decisions and decision on initial appointment.

The article is based on a report by the American Association of Collegiate Schools of Business on the faculty requirements and standards in Collegiate Schools of Business. The author emphasizes the need for remedying the deficit in accounting faculty, which involves a re-assessment of traditional concepts with respect to teacher supply, qualification of teachers and teaching effectiveness. He explains basic recommendations which rise from these courses of remedial action which are, the necessity, to increase salary scales, appraisal of the problem of proper qualification for accounting instruction and experiment with various procedures for improving teacher productivity. Different points of view regarding the increment of salary have been discussed. In relation to the appraisal of proper qualification, the author highlights matters which need considerable research to arrive at useful conclusions. Suggestions for methods of experiment with various procedures for improving teacher productivity and rationalization of the process have been discussed.

Reviews the book "The Law of Accounting and Financial Statements," by George S. Hills

The article discusses various ways to increase the productivity of college teaching. An important and obvious way to meet the challenge of increased enrollment will be to increase the productivity of teachers. The commonest of all means to increase output is to improve and add to the worker's tools. The techniques of radio, television and particularly the moving picture, can greatly amplify the effectiveness of work. In addition to improvement of classroom facilities, the improvement of office facilities will go far to relieving teaching talent of diversionary demands on time and effort. In order to make available teaching talent and effort for the main task of teaching, it is essential in most colleges and universities that teaching staff be provided more adequate assistance from office staffs. Teachers should be better trained and better supervised, that involves class observation by administrators and fellow faculty members for the mutual information and improvement of the observed and the observer.

Reviews the book "Fundamentals of Federal Taxation."

It has been the purpose of this presentation to indicate the thinking of the Cost Committee in developing a statement of concepts of business costs. Possibly the most significant contribution of the study is that it recognizes the various measurements of costs and provides a framework so that all business cost may be grouped under the three headings of planning, control, and income determination. Implementation of the basic concepts of cost for planning and control rests upon various approximations of these basic concepts. Historical cost is well established as one method useful in approximating the basic concepts. An examination of the nature of the historical cost recording process indicates that it is possible, with complete consistency, to develop more pertinent information for planning and control than that now provided within the framework of recording which supplies information for the published reports on income and financial position.