Abstract This article focuses on the insurance reserves in the accounts of non-insurance companies. One who has had no experience with the kinds of insurance reserves that are presented in accounting texts probably should explain his temerity in offering an article for publication. It was triggered by a graduate student's inability to find adequate explanatory materials for this topic in a thesis on the subject of Earned Surplus and Surplus Reserves. Apparently, those who have had experience with such reserves have not shared their experience in accounting publications. Life insurance companies pay annuities to policyholders and beneficiaries. Governments and non-insurance companies may pay pensions. Annuities and pensions are life incomes to the recipients. Pension plans ordinarily provide death benefits payable to named beneficiaries. If a company administers its own pension plan, as of every balance sheet date an actuary should compute the present value of benefits which have vested in employees and their beneficiaries.

Abstract When the income tax treatment of any sort of income or expense differs from conventional accounting, problems of various types arise. The more complex the situation, the harder the teaching job involved. A case in point is the matter of accounting for deferred income tax liability resulting from accelerated amortization of emergency facilities for income tax purpose coupled with conventional depredations for other purposes. The treatment and illustrations that follow have been found to be effective in the classroom. If the installment method of accounting is used on tax returns and the accrual method is used for financial statements, a deferred tax liability on unrealized profits should be provided by debiting income tax expense with the estimated tax that will be paid on unrealized profits accumulated during each year when they ultimately were realized. In any other situation where profits reported in income statements are deferred on income tax returns the same practices should be applied.

Abstract The article presents the author's view on accounting in general and price inflation in particular in the U.S. Every semester when he reviews with a class of students the impact of price inflation on accounting, and every time he reads a published article on this subject in an accounting or business publication, he becomes more aghast at the complete and universal uncritical acceptance of statisticians' superficial findings on this subject. Students particularly seem to be unhappy about the privations which they attribute to high prices. In his opinion, such sadness is fallacious. It is based on views which are biased because those who hold those views have not considered circumstances that are ignored by the statisticians. Great ability is needed to contest unanimous fallacies. The task probably is beyond his abilities, nevertheless he does not remain silent in the presence of neglected truth and unwarranted sadness. He hopes to bring some joys to saddened hearts through this article where he discusses the topics mentioned above.

Abstract The completion of the hypothetical audit, the initial study of text material, and three examinations require about thirty-five class periods. The last ten to fifteen periods are devoted to a review of text material, the case studies, and the tentative statement of auditing standards recently published by the American Institute. The writer also regards the time spent on review as the most valuable learning time in the quarter. Students comprehend the technical problems and questions better after they have completed the hypothetical audit and studied the text. Students often begin their study of auditing after they have learned a number of accounting fundamentals and before they have grasped many of the relationships among these fundamentals. This course enables them to grasp more of these relationships, because they use many of the fundamentals in completing a hypothetical audit. Prior to their study of auditing, most students learn to prepare financial statements by sorting and listing ledger balances, but in completing their hypothetical audit they weigh the significance of their data.

Abstract Reviews the book "Business Budgeting and Control," by J. Brooks Heckert.