The article focuses on professional examinations in accounting. Problems on accounting were prepared by the Board of Examiners of the American Institute of Accountants and were presented as the first half of the C.P.A. Examination in accounting practice on May 9, 1956. The candidates were required to solve problem one and any three of the remaining four problems. The total weight assigned to this section of the examination was 50 points and the suggested time allowances were as follows: problem one, 80 to 110 minutes; any three of the remaining four problems 120 to 160 minutes. The first question is about computing the tax payable by a company. The minimum federal income tax liability by the regular method and by the alternative method is to be calculated. Another question is about a company which has resulted in loss in two consecutive years. The company provides a reserve on its books by charges to income for the losses of its subsidiary. The profits shown above for the company are before provision for amortization of the excess cost of acquisition and for the losses of its subsidiary. The students are required to prepare a worksheet for use in a consolidated balance sheet.

This article presents problems which were prepared by the Board of Examiners of the American Institute of Certified Public Accountants and were presented as the second half of the certified public accountants' examination in accounting practice on May 10, 1956.

The article presents some problems prepared by the board of examiners of the American Institute of Accountants as part of an examination in accounting practice. The first problem required a student to prepare a schedule showing the cash payment of the buyer to the selling party, profit and loss statement of the company involved in the transaction and total taxable income statement of the selling party on the basis of information and conditions given to him. The second problem required the student to prepare a schedule showing how cash payments should be made to partners who are selling, with the realization of assets. The third problem required the student to prepare entreaties to reflect the exchange on the books of a corporation and compute depreciation on the purchase made by the corporation on the basis of the entreaties. The fourth problem required the student to prepare a statement accounting for the decrease in net working capital and a statement accounting for the decrease in cash on the basis of the information supplied. The solutions to each of the problems have been provided.

The author of this article critically examines joint analysis as an aid to management. He refers to a paper by Professor Arthur N. Loring, titled "Joint Cost Analysis as an Aid to Management," published in the journal, "The Accounting Review," in which the results of the analysis is given. The author enumerates the proposals made by Loring to ascertain the existence of the conditions arrived at by applying the analysis. The proposals are to, compute a percentage gross margin for the product group, application of the percentage to the sales value production, to deduct the result in each case from the product's sales value and to compare the remainder with the unique processing cost necessary to render the product salable. The author comments that prescribed methods may yield negative joint allocations to some products and that Loring's proposals and statements are not complete and that he has failed to demonstrate that any method of joint cost analysis is in itself useful for managerial decision-making.

This problem relates to U.S. income taxes and should be answered in accordance with the Internal Revenue Code of 1954. Unless slated to the contrary in the following questions, individual taxpayers are assumed to be resident United States citizens on the cash basis, corporate taxpayers are assumed to be domestic corporations on the accrual basis, and all taxable years are calendar years. The Smith Medical Foundation was established in 1946 to finance research in the field of medical science. It leased building facilities from others from the date of its foundation to December 1953, at which time land and buildings adaptable to its operation were purchased. Since it was desired to operate its plant property as a self-supporting entity the Board decided to account for its plant as a separate fund, by establishment of a General Fund and a Plant Fund.

The author discusses the objectives of internal auditing in this article. He enumerates the objectives of internal auditing as a service to management. These objectives are to assure management that the controls are effective both in operation and as media to identify and reveal matters needing managerial review, bring to attention when controls fail to meet those needs, and act on management's behalf as an instrument of check on various aspects of the business controls. He explains the classifications of internal auditing as an appraisal activity and its objectives. He lists the auditor's objectives in the field of management policies. He describes the audit objectives in the appraisal of business and organizational plans. He focuses on the points which need attention in the standards of appraisal. The objectives of an internal auditor, with the accountant and engineer, in appraising the activity of appraisal of performance, and the areas of auditing which require study have been elaborated. He mentions that an auditor can function effectively only if his accounting training is supported by sound business experience.