Accounting from the business slant;

              ATLANTA HASKINS & SELLS NEW YORK
PHILADELPHIA
BALTIMORE CERTIFIED PUBLIC ACCOUNTANTS PITTSBURGH
BOSTON PORTLAND
BUFFALO SAINT LOUIS
CHICAGO SALT LAKE CITY
CINCINNATI BULLETIN SAN FRANCISCO
CLEVELAND SEATTLE
DALLAS TULSA
DENVER WATERTOWN
DETROIT KANSAS CITY HAVANA
LOS ANGELES LONDON
MINNEAPOLIS PARIS
NEWARK E X E C U T I V E OFFICES SHANGHAI
NEW ORLEANS HASKINS & SELLS BUILDING
37 WEST 39TH ST., NEW YORK
VOL. VI NEW YORK, APRIL, 1923 No. 4
Accounting from the Business Slant
IT would probably sound incongruous to
say that accuracy is the curse of ac­counting.
Yet, viewed from a certain
angle, there is something akin to sense in
the suggestion.
There are still many persons whose idea
of an accountant is that he is quick and
clever at figures. Many business men still
judge financial statements on an artistic
basis, stressing particularly the point of
accuracy.
With many accountants accuracy and
technical presentation are fetishes, the
worship of which warps their sense of
proportion and interferes with a common
sense perspective.
Again, it may seem strange to reiterate
what has been enunciated before; that no
balance sheet or income statement is ever
accurate. The findings are said, and often
certified, to be correct, but after all the
degree of accuracy is one that is relative
rather than absolute.
The important thing about any state­ment
is the information which it conveys,
and the significance which the information
has. Financial statements are but a medi­um
for the expression of conclusions derived
from a scheme, known as accounting, for
recording, classifying, grouping and arrang­ing
the financial data incident to business.
Accounting is, therefore, but a means to
an end; an adjunct or tool of business; a
device for furnishing information. It
appears, consequently, that the data which
accounting produces and reflects by means
of financial statements should be regarded
in the light of its business significance
rather than reviewed from the standpoint
of precision and form.
What is the position of the company
as an investment enterprise; in its relation
to creditors; from a liquid standpoint;
with respect to tax liability; as to proper
proportions between fixed and current
assets, and owned and borrowed capital?
What are the tendencies indicated by these
factors when compared with conditions
existing at a previous date? What rela­tion
do the costs, expenses, and charges,
and gross and net profits, bear to sales;
net income to capital invested? How
many times was the bond interest earned?
How much per share was earned on the
various classes of stock? What was the
turnover of merchandise stock; of capital;
the relation of sales to plant? How do
the classes of expense stand within their