Abstract Recently in the accounting literature two different directions have been taken toward research into the theory of accounting and information systems. One approach seeks to modify conventional accounting to take advantage of increasing computer capabilities, while the second approach advocates including more diversified types of information in accounting reports. Although different, both attempts reflect the accountant's desire to serve users of accounting data better and in a more efficient manner. Toward this end the objective of this paper has been to develop a new approach to accounting and information systems which both generalizes and unifies these two directions of research. The approach presents a framework within which one can work on both the theoretical issues concerned with extending accounting to provide more types of information and the practical issues surrounding the efficient implementation of an accounting system on modern computer equipment. In order to accomplish our objective, a very general definition of accounting was assumed, one which concentrated on the concepts of "communication" and "economic event . The accounting system could then be constructed around a "data base" which consists of descriptions of economic events, ( K + 1)-tuples of the form (c, x 1 , x 2 , &haelip;x k ) where c denotes a binary event code and x 1 , x 2 , &haelip;x k are values of the characteristic used to describe the event. In this multidimensional system, we are not restricted to a single valuation scheme and efficiencies are gained in storage by using a description space of variable dimension. Also because the data base in any company is likely to become quite complex, a generalized concept of an account was introduced. The method described would permit economic events to be classified, sorted, and sequenced in a variety of ways to handle flexible needs of the users.

In this paper, a continuous time model for a monopoly firm of the Evans' type, encompassing operations, investments, and output prices, is formulated as an optimal control problem. In the model the objective of the firm is to maximize, subject to various constraints, the integral of production profits less interest and investment costs over a finite decision-making interval, plus the value of the capacity at the end of the period. The state variables are capacity, debt, and output price; the controls are the scale of operation, rate of purchase of new capacity, and rate of change of the output price. Final capacity, price, and debt are control parameters. There are several inequality constraints. Using results in control theory, the optimal controls are characterized for a model basically linear in structure. It shows that the one case suggested by Evans for further analysis is a trivial problem. These results are interpreted using the properties of the value equation. In addition, the control model is formulated alternatively as a mathematical programming problem. Solutions may then be computed by published algorithms.

The principal objective of this essay is to bring together the theory of a firm's capacity decisions and certain facts of market structure which contribute to the uncertainty about the prices or revenues realized by the firm. The connecting link between the two is furnished by the fact that, under conditions of "competition among a few," the output decisions of an individual firm have a random effect on its own revenues. It is shown that considerations of uncertainty influence the capacity or utilization decisions in a manner which is fundamentally different from that under "pure" competition. In the latter case, a production decision of an individual firm does not change the probability distribution of market prices. This and some related considerations make it practically useful to interpret "capacity" in terms of profitable output--allowing the standards of profitability to be quite arbitrary. Defined in terms of profitable output, capacity emerges as a random variable--random because of the uncertain fulfillment of the standards of profitability. It is also seen that the usual interpretation of the present-value integral is to be abandoned in favor of another which, on a formal level, has close ties with the theory of integration over the space of random functions.

Abstract In this paper we have devised methods for allocating overhead, charges on the basis of mathematical programming models of the firm's production and sales possibilities. The basic scheme was to charge products on the basis of their utilization of the scarce resources of the firm. The prices for use of these resources were obtained from the dual variables associated with the constraints of profit-maximizing programming models. Special attention was given to traceable and avoidable overhead and overhead subsidies that arise because of sales and production interdependencies or managerial constraints. Our objective, in all of these procedures, has been to devise a method for allocating overhead that does not distort the relative profitability of products so that managers would make identical product related decisions both before and after the overhead allocation. As such, the method captures a principal benefit of direct costing analysis while significantly extending this benefit to recognize scarce resource utilization and interaction with other products in reporting profitability. At the same time, the method avoids a difficulty of direct costing systems in that it is a full costing system with all overhead being allocated to products. Also the availability of the original programming model (before any overhead allocations) facilitates marginal analysis for short term product related decisions and expansion of scarce resources.

Using single-equation approaches, previous studies concerned with human capital indicate that education expenditures have a large effect on income. Previous studies concerned with local government behavior indicate that income has a large effect on education expenditures. There is the possibility that essentially the same relationship is being measured, with dependent and independent variables merely interchanged. In this study, the equations are estimated simultaneously. To see why single- and simultaneous-equations estimates differ, expressions are developed for sources of single-equation bias.The major reason for a large single-equation bias in estimating the effect of education on income is found to be the relatively large reverse effect of income on education, which makes for high correlation between independent variable and residual in the equation for income. Single-equation bias in the equation explaining education expenditures is small for the same underlying reason, namely the reverse effect occurring in the equation is relatively small. A by-product is an analysis of demand for education allowing for effects of different forms of wealth, in contrast to the usual approach assuming one overall wealth or income effect. Nonhuman wealth is estimated to have twice as much effect on education expenditures as other forms of wealth.