IN RECENT YEARS a number of theoretical and statistical investigations' in the field of business-cycle analysis have made use of differeince equations, or mixed difference and differential equations. These equations serve to study the possible endogenous movements of a schematized economic system governed by a set of as many structural relations as there are variables, the movements of which are considered. In the investigations referred to, the treatment of such a set of equations has been to eliminate successively all variables but one, which leaves one from which the possible movements of the system under consideration are studied. If the final equation in the variable Zt is a linear homogeneous difference equation or mixed difference and differential equation, possible movements of Zt are found by substituting for it in the final equation an expression of the form2

Capital Theory and the Trade Cycle Get access Tom Wilson Tom Wilson London Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 7, Issue 3, June 1940, Pages 169–179, https://doi.org/10.2307/2967404 Published: 01 June 1940

The problems mentioned in the paper were presented as the second half of the November 1939 C.P.A. examination prepared by the Board of Examiners of the American Institute of Accountants. The candidates were required to solve all problems in six hours. The weights were as follows: problem 1, 10 points; problem 2, 25 points; problem 3, 30 points, and problem 4, 33 points. The set of problems which, while far from an ideal C.P.A. examination, is superior to Part I of the same examination, which appeared in the December issue of the journal The Accounting Review. Unlike problem 3 of part 1, the problems of this set are clearly stated and lead to a solution without imposing on the candidate the added burden of reading the mind of the examiner.

Reviews the book "Business Cycles and Forecasting," by Elmer C. Bratt.

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.

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

The article focuses on various problems, which were prepared by the Board of Examiners of the American Institute of Certified Public Accountants (CPA) and were presented as the second half of the May 1940 CPA examination in accounting practice. The examinee was given six hours to solve problems 1, 2, 3 and either problem 4 or 5. Problems were weighted as follows: problem 1, 10 points; problem 2, 25 points; problem 3, 30 points; problems 4 and 5, 33 points each. In one question, details of two hypothetical companies namely A and B, which are entirely owned and controlled by same interests, are presented. The company A's condensed balanced-sheet for a particular year is presented in the article. In another question, another hypothetical company, namely, S.S. Manufacturing Co. is discussed, which completed construction of its plant for the manufacture of lawn mowers on January 1, 1939 and commenced manufacturing on January 13, 1939. The examinee is required to restate the actual and standard production costs for the thirty-day operating period and show the estimated loss by theft of the 500 lawn mowers.

The problems mentioned in the paper were prepared by the Board of Examiners of the American Institute of Accountants and were presented as the first half of the May 1940 C.P.A. examination in those states using the Institute questions. The candidates were allowed six hours to solve the five problems. A detailed list of problems is mentioned in the paper.

According to the author of this article, it is not his purpose to deal at length with the materials or subject matter with which accounting research might concern it. While some mention will be made of these materials, he is more concerned to develop certain points of view, which he thinks should animate the research worker in accounting. A common assertion by research workers is that a given generally accepted principle ought to be re-examined, or that indeed all of them ought to be re-examined. This is a proposition, which in itself can receive general consent. But it often happens that the statement "that generally accepted principles of accounting should be re-examined" is frequently made by those who already have rather definite ideas for converting those generally accepted principles into something entirely different from what they are, or were ever intended to be. Those accountants who pretend to anything at all along the lines of accounting research cannot ignore the idea which bobs up from time to time, that accountants should try to devise a presentation of their data in entirely new forms.

I. Earlier studies, 399. — Criticisms of these studies, 401. — Methods of meeting them, 402. — II. Assumptions underlying cross-section studies, 403. — The materials studied, 403. — III. The classical method, 406. — Frisch's method, 408. — Koopmans' method, 411. — IV. Values obtained for k and j, 414. — V. Analysis of averages per plant, 416. — VI. Probable flexibility and elasticity of the marginal productivity functions, 418. — VII. Analysis of labor's share, 419.