Journal Article The Durability of Durable Goods Get access E. Kleiman, E. Kleiman The Hebrew University, Jerusalem Search for other works by this author on: Oxford Academic Google Scholar T. Ophir T. Ophir The Hebrew University, Jerusalem Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 33, Issue 2, April 1966, Pages 165–178, https://doi.org/10.2307/2974440 Published: 01 April 1966

The article focuses on the theory of explanation in financial accounting. Observations in this article are a product of screening several articles on the explanation theory, or the theory of valuation, made in the journal "The Accounting review," over the last thirty years. The development of this article begins with that hard core of reliance upon matters of experience which continues to characterize accounting practice. Several species of explanation move in the direction of establishing "fundamental truths" or "first principles." This family of explanations is described in this article as a source explanation. In sharp contrast those types of explanations that base acceptability of propositions on outcomes from the operational employment of one or more propositions as valid. Also, a number of variants of the search for well-springs or foundations of accounting principles have been described. A following section of the article directs attention to a modern emphasis in a segment of accounting writings on a need to orient accounting research toward operational meanings for sentences, and toward prediction qualities for sets of propositions.

The article highlights some attributes required for recruiting superior accounting students. It says that one of the principal problems in the recruitment of capable students to accounting is to identify the students who likely will succeed. Another problem is to inform students and others in an effective manner of the interesting and truthful story associated with opportunities in accounting. Still another problem is to identify and inform people who are influential with capable students, so that these people can counsel and assist their superior students in the selection of a career in accounting. If a person is to succeed in accounting, he must possess a high intellectual capacity. While he must also possess many other attributes, any widely broadcast type of recruitment effort should be directed primarily toward superior students. The efforts described here have been successfully used in recruiting accounting students at Oklahoma State University in Stillwater, Oklahoma. The article discusses various measures taken by the university to recruit accounting students.

The article highlights that at present time a disparity exists within accounting literature in quantifying the idle-capacity variance. The divergent methods used to calculate the variance indicate that, as yet, accountants have failed to agree on its meaning. The theory of overhead absorption has experienced significant improvements in a relatively few years, but it still is not fully developed. This article explores some deficiencies believed still to exist and some possible causal factors related to idle-capacity variance. Primary among the misconceptions covering the idle-capacity variance is an assumption that it measures the dollar loss due to the presence of idle plant facilities. This concept has resulted in a computational stagnation. The results of the stagnation have been a continuance of the idle capacity from predetermined actual rate to standard rates. As a consequence there is a theoretical deficiency in the analysis of standard-cost overhead variance. The article says that there are vast majority of current accounting texts and certified accountant program exam solutions are, it is believed, pursuing a definition under standard costing which is not preferable.

The article presents theory problems and their solutions prepared by the Board of Examiners of the U.S. body American Institute of Certified Public Accountants and presented as certified public accountant examination in accounting practice on November 5, 1965. The candidates were required to solve all problems. The suggested time allowances for various problems were also given. Objective type and lengthy questions were given. Students were asked to state the period for recognizing benefits derived from the investment credit. The answer is that either over the life of the asset or in the year of acquisition. Another problem is about the business report of Superior Manufacturing Co. The company has used straight-line method of depreciating its plant assets. Students are given data calculated by the depreciation method to be used for income tax and stockholder reporting. They are asked that whether depreciation charges recover or create funds. The answer to the problem is that the purpose of depreciation accounting, as traditionally stated, is to spread the cost, less salvage, of tangible, long-lived assets used by an entity as an expense over their useful lives in a rational and systematic manner. The primary purpose is allocation of cost and presumed benefit; valuation is secondary. Cost is understood to include original acquisition and installation cost, plus betterments, additions, and extraordinary repairs. It may also include appraised values as in the case of donated fixed assets.