On the occasion of a corporate merger or combination, the most important issue which arises is the restatement of assets from historical costs to current values. Whether to make such an adjustment is the primary decision to be made before any other major question is considered.' Thus far, the usual approach to this problem has been to base the decision upon whether the combination qualifies as a or a of interests. The first expression refers to situations in which assets of certain parties to the transaction are deemed, in effect, to have been purchased by the surviving entity or interests, with the implied conclusion that they should be restated to current market figures. In the second case, assets are conceived as being merged, without any inference of a transfer or thereof. The implication in this latter case is, of course, that the merged assets should retain the bases of accountability previously adopted by the constituent firms, and this normally means unamortized historical costs. Thus, the attention of accountants has been given primarily to the development of rational criteria for distinguishing between the purchase and the pooling situation, as those two terms have been defined. The continuity of individual stock ownership, management, business objectives, and the business enterprise have all been postulated as appropriate guidelines, together with such other considerations as the relative sizes

The article emphasizes the need for revision of the introductory collegiate course in accounting. Among the needed reforms is the deletion of most bookkeeping and special procedural matters, and this should, of course, be accompanied by the elimination of these subjects from textbooks and other instructional materials. For all truly basic and fundamental purposes, as perhaps many textbook writers will acknowledge, double-entry accounting requires just two kinds of records, each of which performs a distinct and readily explainable function. These are the general journal and the general ledger. It is essential that the student master the use of these two devices at the very beginning of his studies, but he will need no additional knowledge of accounting mechanics for any theoretical purposes. the ledger technique which is adopted depends upon the underlying method of keeping track of the inventory. While such underlying procedures may often receive too much emphasis in textbooks, it is with the ledger practices that the article is concerned.

The article presents examination by the author on one aspect of the conventional accounting funds statement and the schedule of working capital, with particular regard to their value for analysts other than accountants. The central idea which the author has tried to develop is that a certain type of transaction which traditionally has been interpreted by accountants as simultaneously increasing and decreasing the total "funds" by equal amounts may properly appear in both the sources and the applied sections of the funds statement. The proposals for improving the statement do not include this principle and on the whole, it appears that the long-established forms of Exhibit. It must still be regarded as the standard practice. There does not seem to be any inevitable reason why the type of transaction in question must be interpreted in the traditional manner. A more imaginative approach would enhance the capacity of this statement to reveal significant information in a comprehensible form.