ABSTRACT
This chapter explores an exposition of accountancy theory in harmony with sound economic theory. The problem of the accountant is to value the inflows and outflows of payments accident to business enterprises. Accounting should be made, rot solely for the benefit of the management, but for the benefit of individual shareholders and of the public who are potential investors in the corporation and purchasers of the services it renders. Economists and others have often made the gross mistake of attributing to accountants confusion of cost and value, or of identifying cost and valuation. No such crude association can be shown from the facts of modern accounting procedure. Many economists are grieved to find that the balance sheet valuations of accountants are of mongrel origin. Professor Canning considers carefully the various formulas which have been proposed for correcting valuations of assets, especially in preciation accounts.
