accounting and business fluctuations

UNIVERSITY OF FLORIDA LIBRARIES Digitized by the Internet Archive in 2013 http://archive.org/details/accountingbusineOOrayd ACCOUNTING and BUSINESS FLUCTUATIONS [...]... 141-155 15 Paul Grady, "Accounting for Fixed Assets and Their Amortization," The Accounting Review, January, 1950, p 17 D - ACCOUNTING AND BUSINESS FLUCTUATIONS whether accounting, as generally practiced, assumptions is capable — —given certain of affecting business decisions relative to investment, divi- and prices in such a way as to accentuate business on both the upswing and the downswing, as is... Writeups and Writedowns Property, Plant, and Equipment, 1925-1934 Corporate Depreciation Adjustment 1929 to 1949 Exclusive of Transportation and Public Utilities — Amount Relation between Expansion Plans and the Evaluation of Current Business Conditions XI 8 30 38 46 48 48 50 51 62 63 70 70 72 89 XII - ACCOUNTING AND BUSINESS FLUCTUATIONS 15 Relation between Expansion Plans and the Evaluation of Business. .. Thomas Devine, "Depreciation and Income Measurement," The Accounting Review, January, 1944, p 43 26 American Institute of Accountants, Committee on Accounting Procedure, "Combined Statement of Income and Surplus," Accounting Research Bulletin No 8, February, 1941, p 64 20 - ACCOUNTING AND BUSINESS FLUCTUATIONS nal cost which should be written off to reflect consumed, expired, or and the amount which should... of longer term plant and equipment has greatly added to the height of the 'booms' and to the depth of the 'busts.' " 15 In the following chapters, an inquiry into this theory that accounting This accentuates business fluctuations will be made It will be demonstrated how accounting could theoretically affect business fluctuations by de- how its methodology fits into present-day business cycle theory... "Renewal Costs and Business Profits in Relation to Rising Prices," The Journal of Accountancy, December, 1919, pp 413-419; W A Paton, "Depreciation, Appreciation and Productive Capacity," The Journal of Accountancy, July, 1920, pp 1-11 8 "Accountants and Economics with Reference to the Business Cycle," Journal of Accountancy, March, 1923, pp 161-171 The AND BUSINESS FLUCTUATIONS 4 - ACCOUNTING skill... relationship between accounting and business fluctuations via investment decisions, however, is not the same as establishing that accounting methodology is a factor in accentuating these fluctuations Before this possible link can be forged, it must be shown how accounting methods are thought to misstate profits and, moreover, that they tend to overstate profits on the upswing and to understate them... the influence of 'false accounting' , prices rise and, therefore, accounting might be misleading John 9 B Canning expresses a "The Relation of Accounting similar viewpoint: "Erratic accounting to the Business Cycle," ings of the Ninth Annual Meeting of the Instructors in Accounting, pp 115 f 10 K Lacey, Profit Papers and Proceed- American Association of University Measurement and Price Changes, might... determination of income for successive accounting periods is the most important single of this business income has cipal function of accounting purpose of the general accounting reports of a corporation." Writers other than accountants have also recognized this function 12 of accounting Veblen has said that "the all- dominating issue in busiand loss Gain and loss is a question of accounting. " Other writers have... effects of accounting methodology 118 on dividend policy, 124; accounting profits, dividend policy, and business fluctuations, 134; cyclical effect of accounting methodology on wage policy, 135; conclusions on cyclical effect of accounting ON WAGES, 144 VII Implications of the Use of Accounting Data in Pricing Decisions 146 alleged relationship of accounting methodology to price rigidity, 147; evaluation... judged by this standard, is said to cause businessmen to overinvest during prosperity and underinvest during depression, it is and "economic pertinent to inquire into the nature of accounting profit profit." v Postulates Underlying the Revenue One arises at the Measurement moment when Accounting of realization is Profits deemed to take most widely enunciated accounting postulates underlying business income . Internet Archive in 2013 http://archive.org/details/accountingbusineOOrayd ACCOUNTING and BUSINESS FLUCTUATIONS