Cost allocation, Direct costs

Reviews the book "Accounting Fundamentals," 6th ed., by R. Keith Yorston, E. Bryan Smith and S.R. Brown.

Although accounting has long served business, there still remain a number of challenges to its healthy survival. These include the monumental task of accumulating and using pertinent data with respect to all scales and complexities of business activity. Such marshaling of quantitative data is not only a problem of managing the flow of information to assure its reliability but also one of timing the flow to insure its useful freshness. For one thing, the accumulation of adequate needful information is costly. This is especially true since most systems of data flow are predicated on the assumption that complete recording is necessary. This thinking generates systems involving much detail. Frequently such accounting is sufficient to swamp the group of personnel which economically can be assigned to the processing of quantitative information for use in business. Any process of balancing cost of data with the benefits derived from them necessarily involves the problem of providing quantitative data sufficiently reliable to be useful in business.

Reviews the book "Accounting Procedure for Standard Costs," by Cecil Gillespie.

During recent years, when many businesses have reported heavy losses, some economists have accused accountants of erring in so generally charging depreciation on the straight-line basis. That accountants tend to overstate profits in periods of prosperity and to exaggerate losses during depressions is the opinion of those who maintain this viewpoint. These alternate overstatements of profits and losses, it is asserted, lead business managers and investors to assume respective attitudes of over- and under-confidence regarding prospects of business conditions. Therefore, accountants have been urged to forsake the straight-line method of making depreciation charges and, instead, to vary them with business activity. At times, some members of the accounting profession have advanced views of a similar, if not identical nature. From the economic viewpoint a capital asset is primarily a bundle of services receivable in the future and depreciation of the asset may be considered to be the conversion of these services into product values.

Reviews the book "Auditing Methods," by Charles Lawrence.

Reviews the book "Cost Accounting," by Adolph Matt, Othel J. Curry and George W. Frank.

Reviews the book "Accounting Systems: Procedures and Methods," 3rd ed., by Cecil Gillespie.

Reviews the book "Financial Theory--Issues and Controversies," edited by Stephen A. Zeff and Thomas F. Keller.

This article presents the report of the Committee on Doctoral Programs in Accounting. The committee made various recommendations on how to improve the Doctoral programs. It suggested that the doctoral program is the principal educational process for preparing students both for university teaching and for basic research in accounting. Hence the primary objective of the study program for the doctorate should be to develop in the student original and incisive thinking and to create an attitude conducive to study and research. As wide variations in the backgrounds of doctoral students call for individually designed programs of course work, instruction in methods of teaching and familiarity with the learning process should be a part of the doctoral program. At the end of the study program the doctoral candidate should demonstrate proficiency in accounting and a reasonable understanding of economics, statistics, the functional areas of business, the behavioral sciences, and mathematical methods. And finally the demand for college teachers of accounting should not be an excuse for lowering the standards for the doctoral program.