Abstract The core of the working capital concept has been subjected to considerable change over the years. A few decades ago the concept was viewed as a measure of the debtor's ability to meet his obligations in case of liquidation. The prime concern was with whether or not the current assets were immediately realizable and available to pay debts in case of liquidation. In applying this measure a one-year period was frequently used to classify assets and liabilities as current. That is, current assets were those realizable and current liabilities were those due within one year. The focus of attention in recent years has shifted from this liquidation point of view towards the "operating cycle" point of view. This view emphasizes the ability of the firm to pay its maturing obligations from the funds generated by current operations. The article discusses question related to analysis of working capital and the presentation of the amount of working capital at a particular point in time to indicate a rough measure of the "margin or buffer" presently available to meet currently maturing obligations and the presentation of the flow of working capital for past periods and the expected flow covering future periods.

Abstract The article examines the concept of relevant costing for income measurement and evaluates its merits as a generally accepted concept guiding the reporting to the external users of financial data. Accounting is primarily concerned with providing interested parties with the most useful information possible about the financial activities of a specific enterprise. The reports evolving from the accounting process are useful in the conservation, increase and effective use of the material resources of the enterprise. In this role accounting finds itself in the awkward position of having to provide useful information to many different users to be used for many different purposes. One of the most recent concepts to be set forth as a guide in reporting to the external users of financial statements is relevant costing. Relevant costing has been proposed as an addition to generally accepted accounting concepts for inventory evaluation in published financial statements. The proposal of relevant costing should be met by a careful analysis of the theory underlying the concept. If this new concept is theoretically sound, the accounting profession should consider it as an addition to acceptable accounting.

Abstract The proper treatment of manufacturing costs has been a topic of discussion among accountants for many decades. Various treatments recommended range from including only prime costs in inventory to a full costing policy. In recent years, a new treatment of manufacturing costs has been introduced into accounting literature. The advocates of this new concept, generally referred to as direct costing, and the supporters of the conventional costing concept have been engaged in a lively debate as to the relative merits of these concepts. Such debate is desirable and necessary since every new concept should stand the test of controversy before being accepted or rejected by the accounting profession. Most of the debate thus far has centered around the practical usefulness of the two concepts. It is difficult to find a thorough treatment of the theory of manufacturing costs. The fundamental difference between direct costing and absorption costing is in the treatment of fixed manufacturing costs; both costing concepts treat the variable manufacturing costs as part of the product cost. Absorption costing charges fixed manufacturing costs to the product while direct costing charges these fixed manufacturing costs to the period in which incurred.

Abstract Reviews the book "Auditing Principles: A Systems-Based Approach," 5th ed., by Howard F. Stettler.

Abstract Reviews the book "Audit Sampling."

Abstract The period cost concept divides cost data into two broad categories, firstly, "Period" costs which are those costs related to time, i.e., those costs which expire with the passage of time rather than with the volume of business activity, and secondly, "product" costs which include those costs which relate to the product being produced, i.e., those costs which are directly affected by the volume of business activity. Under the period cost concept as it relates to income measurement only variable manufacturing costs are considered inventoriable while fixed manufacturing costs as well as selling and administrative costs are period costs. In general the accounting profession does not accept for income measurement purposes the treatment of fixed manufacturing costs as period costs. Conversely the accounting profession has accepted for many years a period cost approach to the handling of selling and administrative costs. In this article the authors will show that the period cost concept is not appropriate for purposes of income measurement. It is the intention of this article to show that categorizations of cost such as period costs vs. product costs are not relevant to the process of income measurement.