Journal Article The Use of the Short-Cut Graphic Method of Multiple Correlation: Comment Get access Louis H. Bean Louis H. Bean Washington, D. C. Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 54, Issue 2, February 1940, Pages 318–331, https://doi.org/10.2307/1883340 Published: 01 February 1940

I. Necessity of reexamining the received body of economic thought, 201. — II. Historical illustrations of the principle of relativity, 203.— III. Characteristics of an adequate theory, 206.— IV. Meaning of "interdependence, " 207.— The sociology of knowledge, 208.— V. Group problems overshadowed by the main problem of the dominant group, 208.— VI. A theory of value of a dominant group tends to become static, 210.— VII. The concrete purpose in formulating a theory of value, 212.— Approximation, 214.— VIII. The larger processes or fields of relevanee, 214.— IX. Conclusion, 216.

H. M. Somers; Money Wage Cuts in Relation to Unemployment: A Rejoinder to Mr. Kaldor1, The Review of Economic Studies, Volume 7, Issue 2, 1 February 1940,

Reviews the book "Theory of Numerical Roots," by Charles E. Tumminello.

The question whether premiums paid upon the redemption of an entire issue of preferred stock should be charged to earned surplus or capital surplus, has been the subject of difference of opinion among accountants for a long time. Even at present, many members of the accountancy profession seem to take opposite points of view in the matter. This study is based on the reasoning developed from the economic concept of profit and loss in business and from the single entry method of calculating profits. The conclusion, that the premium paid upon the redemption of an entire issue of preferred stock is properly chargeable to earned surplus to the extent that the total premium paid exceeds the amount of premium paid into the issuing corporation on the same issue of preferred stock at the time it was issued. The question under consideration does not deal with the treatment of discount on preferred stock when an entire issue is redeemed at a discount. Accordingly, no comment is made on that phase of the subject.

Accountants have often marveled at the misunderstanding of generally accepted accounting procedure and concepts, which the courts have in the past exhibited. Many decisions not only show misunderstanding but also indicate a failure on the part of the courts to attempt to ascertain the meaning of accounting terminology, which their decisions employ. It is unfortunate therefore to find a court in a recent tax decision turning for guidance to "correct accounting" as set forth in theory and practice only to find lack of agreement on the part of accountants as to theory and even greater disparity between theory and practice. It is only fair to state that the court found a similar lack of agreement on the question in the court decisions it examined. The "sale" of treasury shares can never result in "gain or loss." The question of "gain or loss" arises solely at the time of "purchase," not at the time of "sale." The account "treasury shares," carried on the books when stated capital has not been reduced as provided by law, represents an unallocated reduction and adjustment of shareholders' equities. If the treasury shares are later disposed of, the entire amount received from the new shareholder, should be recorded as any issue of stock, the par or stated value being credited to "Capital Stock" and the difference, if any being adjusted through surplus.

Reviews the book "Executive Compensation Practices of Retail Companies: 1928-1937," by John C. Baker.

Reviews the book "Municipal and Governmental Accounting," by Carl H. Chatters and Irving Tenner.

Reviews the book "Principles of Auditing," by F.R.M. de Paula.