This article presents a classroom-tested method for teaching the cash-flow statement that does not require a complex columnar worksheet. Through the use of this simple outline, a student can learn to prepare a cash-flow statement quickly, and the time which would have been spent discussing the worksheet can now be used in productively examining the analytical nature of the statement. An example of the relationship of non-cash expenses to cash flow completes the introduction to the cash flow from operations and, after a simple example of how changes in the remaining assets, liabilities, and owners' equity relate to cash flow, students are ready to use the outline mentioned in the article. Students are instructed to prepare the statement by following four steps. Step 1 is to compute the increase or decrease in cash. Students should complete the outline by first placing the changes in the Balance Sheet accounts in the proper section of the outline. Then the balances of the appropriate Income Statement accounts are entered in the outline.

Prices go up and prices go down, and with each change in the price level the discussion of replacement-cost usage recurs. It appears that businessmen and accountants were willing to experiment with the use of replacement cost in the 1920's and early 1930's. But this receptivity to its use has declined steadily since then: in the 1940's practicing accountants were opposed to its use; and when "A Tentative Set of Broad Accounting Principles for Business Enterprises" (published in 1962) advocated the use of replacement cost for inventory valuation in financial statements, practicing accountants seem to have given it about as much attention as a ten-dollar mistake in the plant account. Thus if past experience holds true for the future, replacement cost will still receive its share of attention from theoreticians while practicing accountants largely ignore it.

Reviews the book "Topics in Managerial Accounting," 2nd ed., edited by L.S. Rosen.

Reviews the book `The History of Accounting: An International Encyclopedia,' by Michael Chatfield and Richard Vangermeersch.