PROFESSOR OF ACCOUNTING, BOSTON UNIVERSITY COLLEGE OF BUSINESS ADMINISTRA- AND L. CLEVELAND AMIDON, B.Sc., M.C.S., D.C.S. ASSOCIATE PROFESSOR OF ACCOUNTING, NEW YORK UNIVERSITY SCHOOL OF COMMERCE, AND WELTI, CERTIFIED PUBLIC ACCOUNTANTS, NEW YORK KNOWLEDGE OF ALL PRENTICE-HALL NEW YORK PRENTICE-HALL, INC. 1926 HF5635 COPYRIGHT, 1926, BY All rights reserved PRINTED IN THE UNITED STATES OF AMERICA The appreciation of the value of the shorter courses in accounting is constantly increasing. The science of accounting is so near economics that academic institutions include it as a regular, or elective, subject in their curriculum; it is so closely allied to the law that the leading schools of law are requiring it as a prerequisite for admittance; it is inseparable from cost finding, and technical and engineering schools devote considerable time to its presentation. Schools of theology, pharmacy, and agriculture have undertaken the task of providing short courses in accounting for their students; while all institutions that have to do with business administration regard accounting as one of the corner stones of their curriculum. The time allotted for the presentation of accounting in most of the above named institutions is of necessity limited, and the content of the course held within certain limits. The use of an accounting text written expressly for accounting schools, where the courses extend over a number of years, is available for this group of schools and colleges, but it is inappropriate. The selection of such a text places on the instructor the burden of the elimination of much of the material, the abridgment of the matter retained, and the combining with it of such outside material as he may have at his command. This rather unhappy situation is susceptible of improvement through the use of an accounting text which has been prepared for the sole purpose of meeting the requirements of institutions of this character. Approaches to the field of accounting.-There are a number of distinctly different approaches to accounting, from the viewpoint of pedagogy, and each one has its earnest and eloquent advocates. Among the prominent ones, mention is made of the following: The "Account" method, and the "Journal" method, which are as old, perhaps, as accounting instruction itself. A more recent arrival is the "balance sheet" method. None of these methods is without merit, provided 643635 the time for presentation by the instruction staff, and time for comprehension by the student body, is unlimited. A survey course in accounting.-A new method is presented in this text which will meet the needs of any situation where an intelligent working knowledge of accounting is required in one school year, or in less time. This course is built upon the "equation" which, as such, is easily and universally understood, but which, apparently, heretofore, has been regarded as being incidental to accounting, and not as the foundation upon which the science is built. The equation in business.-There is nothing more helpful to the beginner than accurate, terse presentation supplemented by modern visualization. With this combination, progress is made by leaps and bounds. In this text, consideration begins with the simplest equation assets equals ownership. The situation is thoroughly explained, and the accounting treatment visualized by a demonstration, on a form designed for the purpose. A narrative provides material for the student's laboratory practice. Thus the beginning student goes from the simplest business situation to the complex. He is conscious of making progress from his first contact, and of becoming familiar with a new science. Other suitable forms are provided for use, when reflecting the accounting treatment, until such time as a substantial background in accounting has been established. The study of the first eight chapters of the text will result in a satisfactory background. At this time, the student is familiar with the meaning of assets, liabilities, expenses, incomes, capital invested, account structure and classification, journalizing as a mental process, posting, trial balance, noncomplicated adjustments, accruals, prepaids, inventories, balance sheets, profit and loss statements, and closing entries, and has a working knowledge of the rules for making debits and credits. The mechanics of bookkeeping. With the accounting intelligence which the student possesses as a result of his familiarity with the content of the first eight chapters of the text (this should be accomplished in about six weeks' time), "Accounting Expression in Books," is the subject of concentrated attention. The Journal and the Ledger are substituted for the "equation of business" form. At this stage of progress the student recognizes the records made in the journal as incidental to recording the values involved, as debits and credits in the accounts. Then follows, at appropriate times, the substitution of special journals for the one journal, as a result of tabulating the values in respect to related transactions. Another advanced step is taken when the special journals are columnarized for departmental purposes, purchases for Department A., B., C., and D., etc., and for controlling account purposes, the group of accounts with creditors, the group of accounts with debtors, the group of accounts with materials in stores, et cetera. In addition to the one ledger, the subordinate ledgers are introduced and comprehended. Journals for illustration and for use as posting mediums. -The journals for illustration, wherever possible, have been made to serve a twofold purpose: first, a subject of study, as to form and content; second, as a posting medium. In this way, the student uses the Journals, as books of original entry, in developing the Ledger; after this a complete accounting is had. The student then draws up forms of Journals (blank books are provided for the larger sets), similar to those used in illustration, writes up a series of transactions, and has an accounting. When the student knows what to do, and how to do it, the time consumed in writing up a set of books (short sketch) is greatly reduced. This one saving of time makes it possible to present, in a limited number of hours, a very broad course in accounting. The preparation of statements.-Each demonstration reflects the result of operating a business; and each narrative for laboratory practice is completed by the student when the results have been clearly set forth in approved form. The growth of the balance sheet and of the profit and loss statement is progressive. At the beginning, they embrace a few lines; at the close of the course, they reflect a content equal in detail to those used by industrial and financial enterprises. General accounting. The subjects of the first eight chapters have to do with studies in accounting in a broad and general way. Special effort is made to visualize each new feature. The content of chapters nine to twenty-one, inclusive, furnish the material for the introduction of the "Books," and the broadening of the application of the principles of |