While professors come under the regular rules pertaining to all individual taxpayers for Federal and California Income Tax purposes, certain kinds of reportable income and deductible expense require special attention in the U.S. A professor who has income in addition to his salary may deduct some types of expenses before arriving at adjusted gross income. These expenses, being necessary to the earning of this income may include such things as the cost of a portion of his residence as a study where he did the work, depreciation of a typewriter, office furniture, and other equipment, supplies and car, and other travel expenses in connection with research or lectures. Professional income and expenses are computed on a separate schedule and the resulting net income or loss is also being tabulated. The deductible expenses have also been mentioned. Advice has been requested concerning the deductibility for Federal income tax purposes of research expenses, including traveling expenses, incurred by college and university professors in their capacity as educators.

As cost accounting is closely related to cost control and the planning of business enterprises, other academic disciplines have shown more interest in the problem in recent years. There have been many special research bulletins of the National Association of Cost Accountants, there is a special committee of the American Accounting Association and the English magazine Accounting Research has had several articles bearing on the subject and the Journal of Accountancy has devoted space to the subject. The present article discusses the application of cost accounting to manufacturing functions, but the concepts are similarly applicable, in differing degrees, to distribution, selling and other functions of business as well as to government to nonprofit organizations. The main purposes of cost accounting is summarized as income determination, with the cost of goods sold and the inventory valuations being the main results of cost accounting, balance sheet presentation, with the inventory items, the balances in the prepaid and accrued expense accounts and the residual value of fixed assets being related to cost accounting and control of cost by management made possible by having available adequate data to judge performance quickly and also having data for future planning.

Reviews the book "Fund Accounting," by Harry D. Kerrigan.