Journal Article A Note on Banking Policy and the Exchanges Get access R. B. Bryce R. B. Bryce Cambridge, Mass Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 4, Issue 3, June 1937, Pages 240–243, https://doi.org/10.2307/2967460 Published: 01 June 1937

Difficulties of the “claimant” states, 497. — Provision for transfers of revenue in the Australian federal system, 498. — State disabilities resulting from Commonwealth policies, 499. — Measures of relative financial inferiority, 503. — Application of the standards, 505.

Introduction, 626. — Paris, 627. — The price-making forces, 630. — The surplus problem, 631. — Rome, 633. — The Fascist organization, 635. — Use of a base-rating plan, 637. — Berlin, 638. — Optional cartellization, 1930–34, 639. — Compulsory cartellization since 1933, 643. — Conclusion, 647.

Reviews the book "Introduction to Cost Accounting," by Norman Lee Burton.

Reviews the book "Principles of Accounting," by A.L. Prickett and R.M. Mikesell.

Reviews the book "Theory and Mechanics of Accounting," Leo A. Schmidt.

Reviews the book "One Hundred Short Problems, in Corporation Finance," by Herbert E. Dougal and Ernst A. Dauer.

One of the important uses of accounting statistics is to furnish a basis for judgment formation. It is this use which controls the form of accounting statements, the classification of accounts, and the valuations used. Generally speaking, the person with the best information can render the best decision. From this point of view the best accounting would be that which collected and displayed the data in such way that the user would reach the correct decision more frequently than he would if it were collected and displayed in some other manner. If cost prices would cause the user to make the correct decision, cost prices would be the best accounting for that situation. If market prices would cause a better decision, market prices would be the best accounting. Having the above thoughts in mind, It is advocated that the replacement cost of goods sold should be substituted for the cost of goods sold when preparing the profit-and-loss statement of a mercantile or manufacturing concern. By preparing the profit-and-loss statement on a replacement cost basis this expansion policy will be curbed. The merchant will realize that he must recapture replacement cost plus expenses on the upswing and will increase sales prices more rapidly.

This article focuses on the inventory reserves as element of inventory policy. Within the last two years a marked revival of interest in the base-stock method of inventory valuation has developed. Recent literature on the subject has stressed its long-run benefits and its significance under present and prospective conditions of rising prices. These aspects are of major importance, though doubtless the interest of many advocates has been quickened by the possibilities of the method in the computation of profit subject to the undistributed profits tax, should the government allow it for this purpose in the near future. The article describes the important features of the base-stock method and some of the implications and fundamental concepts involved in it. Following this, an alternative procedure now in use, namely the stated reserve method, is presented for consideration in the belief that, as a practical matter at the present time, it is desirable to devote attention to alternatives which involve less drastic changes in traditional practice and yet provide the major advantages of the base-stock method.