Woman C.P.A.

Volume 6 Issue 5 Article 8

8-1944

Woman C.P.A. Volume 6, Number 5, August, 1944

American Woman's Society of Certified Public Accountants

American Society of Women Accountants

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Recommended Citation American Woman's Society of Certified Public Accountants and American Society of omenW Accountants (1944) "Woman C.P.A. Volume 6, Number 5, August, 1944," Woman C.P.A.: Vol. 6 : Iss. 5 , Article 8. Available at: https://egrove.olemiss.edu/wcpa/vol6/iss5/8

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Official Publication AMERICAN WOMAN'S SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS AMERICAN SOCIETY OF WOMEN ACCOUNTANTS

AUGUST 1944 American Woman’s Society of Certified Public Accountants OFFICERS MRS. GRACE SCHWARTZ KEATS, C.P.A...... President Suite 1551, 10 South LaSalle Street, Chicago 3, Illinois MRS. HAZEL JOHNSON SKOG, C.P.A...... Vice-President Keystone Frame & Manufacturing Company, Spokane, Washington ETHLEEN LASSETER, C.P.A...... Vice-President First National Bank of Atlanta, Atlanta 2, Georgia JOSEPHINE KROLL, C.P.A...... Secretary 5455 Pensacola Avenue, Chicago 41, Illinois MRS. ALICE HAYES HAGGERTY, C.P.A...... Treasurer 509 Equitable Building, Wilmington, Delaware DIRECTORS MRS. GRACE A. DIMMER, C.P.A. (Exofficio)...... 904 Michigan Building, Detroit, Michigan JANE E. GOODE, C.P.A...... Suite 1224, 621 South Hope Street, Los Angeles 14, Calif. MARGARET E. LAUER, C.P.A...... Pere Marquette Building, New Orleans 12, Louisiana PHYLLIS O’HARA, C.P.A...... 54th Floor, 405 Lexington Avenue, New York 17, New York CHAPTER PRESIDENTS ALMA E. RASMUSSEN, C.P.A...... Chicago Suite 1218, 105 Adams Street, Chicago 7, Illinois HELEN LORD, C.P.A...... New York 342 Madison Avenue, New York, New York American Society of Women Accountants OFFICERS JANE E. GOODE, C.P.A...... President Suite 1224, 621 South Hope Street, Los Angeles 14, California GERTRUDE PRIESTER, C.P.A...... Vice-President Maguire Industries, Inc., 500 Fifth Ave., New York 18, N. Y. EDNA GRAMBORT ...... Vice-President 525 Arlington Place, Chicago 14, Illinois GRETCHEN WELLS, C.P.A...... Secretary 1438 Reeves Street, Los Angeles 35, California ELIZABETH STOWELL ...... Acting Treasurer 1224 Pacific Finance Bldg., Los Angeles 14, Calif. DIRECTORS BARBARA BATEMAN, C.P.A...... 818 Realty Building, Spokane, Washington MABEL BRILLHART ...... 2155 Pierce Avenue, Chicago 22, Illinois OLGA DEUTSCH ...... 12th Floor, Washington Blvd. Bldg., Detroit, Mich. JEAN NEIL ...... 1440 Fifth Avenue, Terre Haute, Indiana HELEN WILKIE, C.P.A...... 1008 American Building, Seattle 4, Washington CHAPTER PRESIDENTS EMILY BERRY ...... Indianapolis 229 N. Mount Street, Indianapolis, Ind. BEATRICE LENTH ...... :...... Chicago 3852 N. Keeler Avenue, Chicago 41, Illinois ROSE M. GLENN...... New York Suite 320, 500 Fifth Avenue, New York, New York MARTHA JOHNSON ...... Spokane Brewer Pine Box Co., P. O. Box 1715, Spokane, Wash. MARIE EERBEEK ...... Detroit 4434 Meldrum, Detroit 7, Mich. VERA JEAN BOBSENE...... Los Angeles 2351 W. 20th St., Los Angeles 7, Calif. LA FERNE WILLIAMS...... Terre Haute 64 S. 17th, Terre Haute, Ind. MARY HOLLAND ...... Seattle 818 24th Ave., Seattle, Wash. JULIA G. NORSE, C.P.A...... Grand Rapids 407 Peoples National Bank Bldg., Grand Rapids 2, Mich. HELEN J. MADDEX, C.P.A...... San Francisco Price, Waterhouse & Co., 1000 Balfour Bldg., San Francisco 4, Calif. SUSIE SUDDERTH ...... Atlanta Retail Credit Co., 90 Fairlie St., N. W., Atlanta, Ga. The WOMAN C.P.A. Official Publication AMERICAN WOMAN'S SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS AMERICAN SOCIETY OF WOMEN ACCOUNTANTS

VOLUME 6 AUGUST, 1944 NUMBER 5

SUBSCRIPTION PRICE ... 1.00 ANNUALLY The Woman CPA is published bi-monthly in the interest of accounting and the progress of women in the profession. While all material presented is from sources believed to be reliably correct, responsibility can not be assumed for opinions or interpretations of law expressed by contributors. Comments of readers are cordially invited and if received in sufficient proportion a forum sec­ tion will be included for presentation of them to other readers. Editor, ETHLEEN LASSETER, C.P.A. Assistant Editor, ANITA HAGE c/o First National Bank 23 51 West 20th Street Atlanta 2, Georgia Los Angeles 7, California ASSOCIATES PHYLLIS O’HARA, C.P.A.______Technical Articles 54th Floor, 405 Lexington Avenue, New York 17, New York ALBERTA R. CRARY______Income Tax 107 South Washington Avenue, Whittier, California ALMA E. RASMUSSEN, C.P.A. ______Current Literature Suite 1218, 105 West Adams Street, Chicago 7, Illinois HELOISE BROWN, C.P.A______Coast-to-Coast News 1727 Marshall St., Houston 6, Texas ______In this Issue______Coast-to-Coast ______Heloise Brown Page 4 What Accountants Should Watch______Rush H. Pearson Page 6 Program—Joint Annual Meeting______Page 7 Tax News ______Alberta R. Crary Page 8 A College Group Looks at Inflation______Peggy Kalpakian Page 10 What’s New in Reading______Alma E. Rasmussen Page 12 Accounting for Interstate Motor Carriers______...______Ruth A. Clark Page 13 Welcome—And A Challenge! It is with distinct pride that official announcement is made of the formation of two new ASWA chapters and the administration of AWSCPA and ASWA both extend a hearty welcome to San Francisco Chapter and Atlanta Chapter with sincerest wishes for success that will even eclipse that indicated by present prospects. The enthusiasm with which the idea of an ASWA chapter was received in each of the cities was gratifying beyond measure. The eagerness of women who are actively engaged in some phase of accounting work or in advanced study of accounting and who have professional aspirations, for such service and benefits as are available only through local chapters of nationally recog­ nized accounting associations presents a definite challenge to AWSCPA and ASWA. Just as the accounting profession has grown with such amazing rapidity in the past few decades that accountants can scarcely keep up with the pace, so have the opportunities for women in the field increased with greater rapidity that the number of qualified women available. Women CPAs can make an invaluable contribution to their profession by assisting other women to attain their professional status—which can be done more effectively through ASWA chapters. Who will be the first to accept the challenge with the next newly organized chapter? Coast - to - Coast HELOISE BROWN, C.P.A., Houston, Texas Atlanta ing program under an able instructor. Begin­ ning with the January meeting Taxes will be At a meeting held Tuesday afternoon, July the subject for study. 25 at 5:30 in the Directors Room of The First National Bank, Atlanta Chapter was formally Chicago launched. Enthusiasm and interest manifested Newly elected officers of Chicago Chapter by the large group of outstanding women pres­ were installed at an impressive ceremony which ent assure its growth and development into a was the principal feature of a beautifully ap­ chapter that will contribute immeasurably to­ pointed tea held on Sunday afternoon, June 18, ward the aim of ASWA. in the Rose Room of the Knickerbocker Hotel. Constitution and By-laws drawn up by the Mrs. Grace Dimmer of Detroit served as in­ committee appointed at an earlier meeting were stallation officer. presented. After some discussion and minor On this occasion guests were invited to at­ changes they were unanimously adopted. tend which resulted in a pleasing number of Election of officers was then held with the new memberships. following being elected as the chapter’s initial Helen McCluer became the bride of Chester official staff: Susie Sudderth as President, Mrs. Niedwick, also of Chicago, on June 24th. Best Marjorie P. Amandola as Vice President, Eliza­ wishes for a world of happiness to the newly­ beth Cathcart as Secretary, Mrs. Mildred Stan­ weds! field as Treasurer. Directors elected for a term of one year were Eugenia Pearson and Lucile Detroit Taylor; two years, Mrs. Elizabeth Kress and The annual installation dinner of the Detroit Virginia Wood; ex-officio, Ethleen Lasseter. Chapter of The American Society of Women Concluding the meeting were remarks of the Accountants was held June 27th. Several days newly elected president who, in outlining ten­ prior to the meeting, an article regarding the tative plans for the coming year, stated that an activities of the society appeared in one of the educational program would be offered in addi­ Detroit papers and those attending the meet­ tion to constructive programs at the regular ing were delightfully surprised to find a beauti­ monthly meetings. ful floral piece decorating the speaker’s table— With her charming personality and demon­ these flowers were sent by the Michigan So­ strated ability, Miss Sudderth is exceptionally ciety of Certified Public Accountants. well qualified for her post as chapter president. This recognition won by the Detroit Chap­ She has a B.S.C. degree from the Evening Col­ ter of ASWA is an honor that they should lege of the University System of Georgia and is justly be proud of. a member of Delta Mu Delta, national hon­ Mrs. Grace Dimmer and Mrs. Hazel Scott orary commerce fraternity. In the business attended the tea given by Chicago Chapter for world she has a long and enviable record of the installation of its newly elected officers. service with the Retail Credit Company, being Mrs. Dimmer presided at the installation cere­ at present tax accountant. Her record of service monies. toward the war effort is also noteworthy. A member of the Motor Corps of AWVS she gen­ Los Angeles erously devotes her Saturdays to driving for Mrs. L. T. Ellerbrook, Revenue Agent with service men and women. the Bureau of Internal Revenue Department, The first regular monthly meeting of the was the guest speaker at the Los Angeles Chap­ chapter will be held Tuesday evening, Septem­ ter of ASWA at the meeting held July 25th ber 12, at the Atlanta Athletic Club. Mrs. at the Clark Hotel. Mrs. Ellerbrook spoke on Marjorie Amandola as program chairman has Operations of the Internal. Revenue Depart­ announced that guest speaker will be George B. ment and those attending that meeting have a Hamilton, Treasurer of the State of Georgia. clearer understanding of the many problems Virginia Wood as chairman of the educa­ confronting the Revenue Department and the tional committee has announced that for the manner in which these problems are handled. remainder of 1944 educational meetings would The regular monthly tax and board meeting be devoted to study of the Job Relations Train­ of the Los Angeles Chapter met August 7th

[4] with an informal discussion of current tax Spokane problems. In place of the regular monthly dinner pro­ Aurora Dufaur, Victoria Regina Shainoff, gram for July, the Spokane Chapter spent the Irma S. Hartwell, and Elsa Jaehne are being evening of July 21st on a picnic at Manito welcomed as new members into this Chapter. Park. Seventeen members of the Chapter at­ San Francisco tended the social gathering—thoroughly enjoy­ The San Francisco Chapter of The American ing the picnic lunch and an evening of re­ Society of Women Accountants held its organ­ laxation at the park. An educational program izational dinner meeting at the Whitcomb has been planned for the meeting scheduled for Hotel in San Francisco on June 22nd. Miss August. Helen J. Maddex, C.P.A. on the staff of Price, Amy Harriscn, chairman of the program Waterhouse & Company in that city, presided committee, has announced the following con­ at the meeting. Jane E. Goode, National Presi­ structive program for the coming year which dent of ASWA, gave an interesting talk on includes a variety of subjects and a pleasing the history, aims, and purposes of The Ameri­ balance between member speakers and guest can Society of Women Accountants. speakers: The response to the idea of the formation August Remington-Rand showing of business of a chapter of ASWA in San Francisco was machines overwhelming. Those women present voted to September Member speaker: Economic Changes appoint a nominating committee for the nomi­ October Topic: CPA Examinations nation of officers and a committee for the November Guest Speaker: Department of Internal Revenue drawing up of a constitution and by-laws for December Xmas Party: State and City Taxes and the new chapter. Licenses The second meeting of this chapter was held January Guest speaker: Personal Income Tax July 19th at the Riviera Restaurant. Thirty­ February Member speaker: Corporate and Partnership eight women were present—this being an in­ Income Tax crease of 16 over those present at the initial March Guest speaker: Credits meeting in June. The constitution and chap­ April Elections: Member Personal Problems ter by-laws were discussed and adopted by May Open: Question of the Day those present. Spokane Chapter welcomes as new members An election of officers was held with the Pearl M. Hagar, Lillian L. Hall, Bernadine A. following being chosen as officers of the new Conaty, Mrs. Lorraine Robertson, Mrs. Cath­ chapter for the coming year: Helen J. Maddex erine E. Brown and Eleanor J. Elder. as President; Ann M. Drabek as First Vice President; Marilyn Barnett as Second Vice Here and There President; Mary Lanigar as Recording Secre­ H. Claire Haines, prominent Certified Pub­ tary; Virginia K. Cary as Corresponding Sec­ lic Accountant in Salt Lake City, has been ap­ retary; Ruth A. Wallace as Treasurer; and pointed as a member of the State Committee Catherine Greene, Nora Delmar, and Margaret for Economic Development of Utah. This com­ H. Clarke as Directors. mittee is finding many avenues of interesting To date, thirty-five women have filed ap­ and useful economic exploration, such as—the plications for membership and many more have backlog of consumer purchasing power; what expressed their interest in the organization. items, in particular, people will want after the Miss Helen J. Maddex, the sponsor of the war; what is needed to develop such resources; San Francisco Chapter, was a charter member how many additional jobs can be produced by of the Seattle Chapter of ASWA and was the industrial expansion; and many other post-war second president of that chapter. She received plans. , her C.P.A. certificate in May of 1942 in the The people in Utah, as in many other parts state of Washington and is an associate member of our country, have experienced a transfor­ of the Washington Society of C. P. A.’s and the mation during the past few years due to pro­ American Institute of Accountants. She has duction for war purposes and extensive mili­ been on the staff of Price, Waterhouse & Com­ tary installations. They have had a consider­ pany in San Francisco since January, 1943. able increase in civilian population in addition Members of ASWA and ASWCPA join in to military personnel, and from present indi­ wishing Helen Maddex and the San Francisco cations, it seems possible that many people will Chapter continued success. Please turn to Page Eleven

[5] What Accountants Should Watch By RUSH H. PEARSON, Personnel Consultant, Montgomery, Alabama All too frequently the very characteristics and ability to get along well with subordinates which make one proficient at a job tend also and superiors than upon technical ability to do to limit his ultimate success in his chosen field. the mechanical part of the job. Especially is Consequently, it behooves the ambitious to com­ this true the more important the position occu­ prehend that fact and to know what character­ pied by the accountant. In a large concern one istics he should watch so that his achievements graduates from being just an accountant the may equal the fullest measure of his ability. higher he progresses in the organization and Most important for accountants to watch are takes on the responsibilities of an executive. those characteristics which have led to the ob­ People who are qualified technically to do servation that accountants are not good mixers. any mechanical type of work are plentiful. There are exceptions, of course, but most ac­ Competition in this group is keen; but to find countants do not devote enough time and an individual capable of meeting the technical thought to the art of making themselves popu­ requirements of an accountant and still main­ lar with others. taining that nicety of balance which permits If one will only check the facts, the reason him to sway and control the emotional reac­ for this reaction will be perfectly obvious. The tions of his associates and the public, is the first requirement for an accountant is accuracy, exception and not the rule. for an accountant deals primarily with facts. A thing is either accurate or inaccurate. There Not all accountants can become expert sales­ is no compromise. men, especially if they are to still remain good This atmosphere has a tendency to cause one accountants; but one would be surprised just to take on an impersonal attitude not only to­ how much more he could accomplish if he ward things, but also towards people. The ac­ would be more conscious of the fact he would countant is normally not considered a salesman; gain more if he would become a better mixer. he is regarded more as a technician who should And how may one become a better mixer? In function without feeling or emotion and whose just the same way he can become a better ac­ sole duty is to work toward the purpose of countant or improve his technique and ability supplying facts regarding any phase of business for any work he may be doing. To become a or operations. better mixer one should first know more about people; second, he should develop the knack of Most accountants seldom come in contact liking people. with the public. When they do their business is limited to discussing the facts without in­ Not all individuals can reach the same de­ jecting their personality. This is easy to under­ gree of proficiency in getting along well with stand, for when one permits his personality to others, but all individuals can do a better job become a part of a situation his emotions are of causing others to like them, if they will in­ more susceptible to stimulation. In an emo­ telligently study the subject and honestly and tional state one’s judgment is less likely to be whole-heartedly make an effort to look for the accurate. So an impersonal attitude is usually things in others that they like, rather than en­ a safe and satisfactory stand for an accountant deavor to discover another’s faults. to assume in approaching his everyday technical problems. The accountant by nature is trained to locate and call attention to error. Because of this urge, This method of maintaining an impersonal cultivated or native, he may be too prone to attitude is most efficient so far as his actual work find fault with others and to express his views is concerned, but the little matter of losing the quite frankly. Faultfinding is most detrimental, "human touch” is endangered in the process. especially if one desires to be a good mixer. If it is possible for one to assume an impersonal attitude when the occasion favors this action, This formula taken from The Executive’s and later show a friendly attitude when an im­ Manual seems to sum-up the entire thought: personal attitude was no longer necessary to "In dealing with things accuracy is the pri­ guarantee accuracy, the perfect personality for mary requirement, but in dealing with people an accountant would be the result. constructiveness is the primary requirement; It is always well to remember that promo­ therefore, accuracy becomes secondary in im­ tion many times depends more upon personality portance.”

[6] ______Program______

JOINT ANNUAL MEETING American Woman’s Society of Certified Public Accountants and American Society of Women Accountants

NEW HOTEL JEFFERSON, ST. LOUIS, MISSOURI OCTOBER 13-15, 1944

FRIDAY, OCTOBER 13 4:00 PM Registration begins—Headquarters Suite Fee $3.00 6:30 PM Informal dinner to be arranged for delegates ------8:00 PM Board meetings and committee meetings—AWSCPA and ASWA. All registered delegates invited to attend committee meetings.

SATURDAY, OCTOBER 14 8:30 AM Joint Breakfast Meeting 1.25 Reports of officers and committee chairmen General discussion and new business 12:30 PM Joint Luncheon Meeting 1.75 Reports of committees for revision of By-laws of AWSCPA and ASWA 7:00 PM Dinner (Informal) 3.00 Guest Speaker—Edwin H. Wagner, Sr., St. Louis Council Member, American Institute of Accountants Resident Partner, Touche, Niven & Co.

SUNDAY, OCTOBER 15 10:00 AM Brunch 1.75 11:00 AM Meetings of Board of Directors—AWSCPA and ASWA Chapter Administration Conference -----

NOTE To facilitate completion of arrangements, advance reservations should be made promptly with Mabel Jane Hamilton, 1129 North Alabama Street, Indianapolis, Ind. Reservations should be made promptly also for transportation and hotels. For the latter address Gregory R. Lucy, Sales Manager, New Jefferson Hotel, where all meetings will be held. Requests for hotel accommodations should indicate if the delegate expects to remain in St. Louis for the annual convention of the American Institute of Accountants which will be held at the Jefferson October 16-19. Many members have already expressed their intention to take advantage of the invitation of the American Institute of Accountants to women accountants to attend their annual meet­ ings. Wartime and postwar problems confronting the profession will be the general theme of the meeting. The annual dinner will be held on Wednesday evening, October 18.

[7] ______Tax News______

ALBERTA R. CRARY, Whittier, California

The Individual Income Tax Act of 1944 re­ All of the deductions from gross income to ceived presidential approval on May 29, 1944. arrive at "adjusted gross income” under the The provisions of this bill may make it neces­ above six divisions are limited to deductions sary to revise tax estimates in September or allowed under Section 23 of the Internal Reve­ before the final filing date of January 15, 1945. nue Code. However, Section 8 of the new law CORRECTION: In the June issue of The contains certain limitations on deductions al­ Woman C.P.A., Adjusted Gross Income in Tax- lowed under Section 23. It will be well to look News was defined as gross income minus cer­ at each of these deductions carefully. Some of tain eight deductions. Number 7—Charitable the standard deductions used under prior laws deductions and Number 8—Medical and dental may not be allowable under the new law. deductions were included in that list in error. (1) Trade and Business Deductions— The Tax Editor asks your pardon. Following is "The deductions allowed by Section the definition of "Adjusted Gross Income” as 23 which are attributable to a trade or defined in the bill as passed. business carried on by the taxpayer, if "Adjusted Gross Income” is defined as gross such trade or business does not consist income minus the following deductions: of the performance of services by the (1) Trade and Business Deductions — ex­ taxpayer as an employee.” penses incurred in the operation of a On the 1943 return and those of former business or practice of a trade or pro­ years, item one, page one of Form 1040 asks fession, but not if tax payer incurs such for wages, and salaries less deductible expense. expense as an employee. Deductible expenses there meant, state unem­ (2) Expenses of Travel and Lodging con­ ployment insurance contributions, union dues, nected with Employment—expense of tools, professional licenses and dues, special travel, meals and lodging while away clothing needed in performing services, travel­ from home if in connection with the ing expense. Under the 1944 Act only traveling performance of services as an employee. expense in the above list may be deducted if (3) Reimbursed Expenses in Connection the taxpayer is an employee, to arrive at ad­ with Employment—this applies to ex­ justed gross income. It is assumed that if the penses incurred by the taxpayer for taxpayer is an employee, these other deductions which he receives reimbursement from may be deducted to arrive at net income, if his employer either as a stated allowance the optional standard deduction is not used. It or payment for expense actually in­ is to be hoped that when the regulations cover­ curred when these deductions are taken, ing the new law are issued, that a clear ruling monies received from the employer for on this point may be included. traveling expense must be included in To have a clearer idea of the meaning of gross income. "adjusted gross income” under the new law, (4) Deductions Attributable to Rents and let us look at Form 1040 for the year 1943, Royalties—interest, repairs, taxes, de­ taking each item from numbers one to ten, preciation, rental commissions, and other and see if we can find the differences to be expenses incurred in connection with considered under the 1944 Act. rental property. FORM 1040: (5) Certain Deductions of Life Tenants and Income Beneficiaries of Property—de­ Item 1—Salary, Wages and Compensation preciation and depletion deduction are for Personal Services less Deductible expense. allowed to life tenant of property or If the taxpayer is an employee, these de­ to an income beneficiary of property ductible expenses are limited to those incurred held in trust. for travel, meals, and lodging while away from (6) Losses from Sales or Exchange of Prop­ home, or for those for which he is reimbursed erty—Capital losses or losses from sales directly by a separate payment by his employer. of property other than capital assets are The report of the Senate Finance Committee deductible in arriving at adjusted gross includes this explanatory statement: "Thus, income. for example, an employee who incurs expenses

[ 8 ] for his employer for which he is reimbursed Item 8—Net Profit or loss from business or or for which he receives a per diem remunera­ profession from Schedule C (2). tion, would include in his gross income the This is gross income from business minus amount of the per diem or reimbursement, but the deductions allowed in prior years. Though would be entitled to deduct the amounts paid the tax services and commentaries have gone to out by him for expense.” From this, it is neces­ great lengths in discussing this, item (1) un­ sary to include all amounts received from the der Section 22 (n) dealing with adjusted gross employer for traveling expenses. Every em­ income headed "Trade or Business Deductions,” ployee who incurs traveling expense should keep it does not appear that the man in business for a detailed account of these to prove his deduc­ himself, or working at his trade or profession tions. Expenses that may be included in this on his own will follow any different procedure deduction are: Airplane, train, bus, or boat on the 1944 return, to arrive at net income or fares; auto expense and depreciation; baggage loss from business or profession, than he has in and porter charges; meals and lodging; tele­ the past. If he uses Schedule C (2) or like phone and telegraph costs; and sample room schedule provided or submits a separate sched­ charges. ule showing the operations of the business, the Items 2 and 3—Dividends and Interest on results will be the same as in past years. In the corporation bonds, bank, deposits, notes, etc. event of a net operating loss carryover, this The gross amount of income from these deduction is to be computed in arrived at net sources must be included in full. Expenses in­ profit or loss for the year. curred in collecting this type of income will Item 9—Income or loss from partnerships, not be allowed in arriving at adjusted gross in­ fiduciary income and other. come. The 1942 Act allowed the deduction of This item would be the amount shown on all expenses incurred in the production of in­ the partnership or fiduciary return as earned come. It seems now that these deductions will by the taxpayer. Beneficiaries under a trust may no longer be deductible unless connected with or may not be entitled to a deduction for de­ a trade or business or property producing rents preciation or depletion on property, held in and royalties. trust. If income is distributed to the beneficiary Item 4—Interest on Government obligations, disregarding the depreciation, deduction is al­ etc. (a) and (b) from Schedule A. lowable to the beneficiary. If the terms of the Item 4 (a) under prior laws was hot subject trust instrument specify that the trustee make to the normal tax rate of 6%. It is now tax­ distributions of income from net income after able at the new surtax rates which included this deduction, the deduction will be taken by the old normal tax. the trustee. A question arises here, if whether Item 5—Annuities. or not a member of a partnership who, sepa­ Includes all subject to usual limitations. rately owns an automobile, machinery, or fix­ Item 6—(a) Net gain or loss from sale or tures used in the partnership business, is entitled exchange of capital assets. to deduct depreciation of these assets from (b) Net gains or loss from sale or exchange partnership income to arrive at adjusted gross of property other than capital assets. income. Regulations may clear this and other This includes all exchanges of all capital as­ questionable deductions. sets—bonds, stocks, non-business, bad debts, Item 10—On the new return should be total etc., and capital loss carry-over. "Adjusted Gross Income.” Item 7—Rents and Royalties. It is necessary for taxpayers to arrive at the The amount of this item to be included is amount of adjusted gross income to determine the gross amount received less expenses incurred whether or not to use the optional form and in the operation of the property from which take the optional standard deduction. If the income is received. The list of deductible ex­ adjusted gross income of one spouse in case of penses include: depletion, depreciation of build­ joint return, is less than $500, the normal tax ings and equipment, patents or copyrights, exemption on the return is limited to $500 for leasehold improvements, losses, casualty, fire or one spouse and the amount of adjusted gross damage suits, repairs and decorating, interest income of the other spouse. As an example, if on mortgage, insurance—fire and liability, taxes the husband’s adjusted gross income were —real estate, payroll taxes on necessary em­ $4000, and the wife’s adjusted gross income ployees, and other operating and maintenance is only $400, the normal tax exemption on expense. Please turn to Page Eleven

[9] A College Group Looks at Inflation PEGGY KALPAKIAN, Los Angeles, California At the January meeting of the Xi Chapter But how much will those dollars buy? Quite of Phi Chi Theta, women’s national commerce obviously, the proper worry should be whether sorority, at the University of Southern Cali­ the dollars the Government pays out in settle­ fornia, there was an informal, animated dis­ ment of its debt will then buy only half, or cussion of inflation. a third, or a tenth of what it now does. In Chairman Peggy Kalpakian opened the dis­ other words, will we eventually see a great cussion with Professor Kemmerer’s definition of inflationary rise in the price-level? We have inflation: "Inflation is too much money and seen what would cause that: a continued un­ deposit currency—too much currency in re­ checked creation of money. lation to the physical volume of business be­ "It is not unfair to point out that the Ene­ ing done.” mies Number One of the American people— "I don’t agree,” one of the girls exclaimed. after the Germans and Japanese are disposed Her interpretation of inflation was that the of—will be the irresponsible monetary theorists circulation currency remained relatively the who are leading many people to believe that same and that the dollar would not buy as our federal debt can go on increasing indefi­ much as it previously had. Several girls took nitely. Such debt-increase means nothing now part in defending and criticising the definition, but the creation of more 'invisible money,’ each stating her opinion on the matter—de­ which—we must all never forget!—can buy crease of supply of consumer goods, increase anything greenbacks could buy. This money­ of supply of currency, increase in deposit cur­ creation, unavoidably, will have gone to such rency, price changes and physical productivity lengths by the time the war ends that the first changes, total income rises more than produc­ thing necessary will be to stop it. Unchecked tion. The result was that they admitted the it would be the one certain course that would words physical volume justified the definition. plunge us into a tragic inflation. Inflation from the monetary standpoint was " 'How can it be checked?’ By sufficiently mentioned—how the increase in currency sup­ heavy taxes on a high national income—for ply, through bank deposits, brings about the example, 25% federal taxes on an average na­ much-feared condition of inflation, how there tional income of $100,000,000,000 would do has already been a tremendous increase in cur­ the job. Those who hold that our national in­ rency circulation, how the government debt come can only be increased by 'deficit-financing’ enters into the picture as a source of inflation. overlook our impressive history of economic When the government, over a period of time, growth.” receives a smaller amount of income than is From here, the subject drifted to other coun­ sufficient to pay its bills, it must "create cur­ tries and their current war labor problems. In rency” by increasing bank deposits. England, following a registration of the entire A theory currently discussed in economics population at the outbreak of the war, a 70-80- classes emphasizes the fact that the govern­ hour working week prevailed, but it was found ment debt is not similar to an individual debt that this did not give rise to maximum output since it is a debt of the people to the people. and hours were reduced to 50 to 60 per week. It might be compared to owing something Income to workers has increased through over­ (monetary) to oneself. For this reason, the time and competition for labor and it follows "debt” could go on increasing without the that demand becomes greater, with the addi­ customary fear of repayment. , tional problem of lack of consumer goods to On the same subject, a quotation from Harry meet the demand. Canada has inaugurated a Scherman’s Inflation in One Easy Lesson was wage stabilization set-up in which a given wage brought up: "Too frequently one hears it said is paid in addition to a bonus which fluctuates that our total federal debt will rise to such in accordance with cost of living. This in­ levels that eventually it will have to be "re­ teresting attempt at stabilization is the only pudiated.” Few things are more certain than one of such a direct nature in a democratic that the United States Government will never country. fail to give dollar for dollar on the face amount Everyone put in her comment on the im­ of its debt. It will do so even if it is obliged portance of raw materials and their converti­ to create additional money for the purpose. bility to war use. Coal, iron, steel, steel alloys,

[10] rubber, oil, textiles, and foods were the basic an opportunity in private enterprise, thus raw materials discussed; their relation to the avoiding a critical unemployment situation in war effort and comparisons of the allied and the reconversion of industry from war to peace. axis resources were brought out. Potential man­ It has been estimated that we should have at power, plants and equipment, and consumers least 20% more jobs available after the war goods were touched on in the course of the than we had available in 1940 and this is one lively discussion. These play important roles on of the important problems now confronting the homefront in that they constitute the back­ the Committee for Economic Development. bone of the war-time set-up. Miss Haines’s appointment to this important The relation of inflation in wages to former committee is pleasing recognition of her ability. wages was discussed both from a national eco­ nomic point of view and from a personal point New AWSCPA Members of view. A few historical points were men­ AWSCPA welcomes as a new member Miss tioned, such as the lagging of skilled labor Viola Becklin of Brookfield, Illinois. Miss Beck- wages in Germany after World War I. The lin, who obtained her C.P.A. certificate in May fact that Germany was crushed after the last of 1943, is employed by H. E. Snyder & Com­ war and that the United States was victorious pany, Certified Public Accountants, in Chi­ is significant here. Historical patterns are im­ cago. She holds a B.A. degree from the Uni­ portant for anticipating the future, but all the versity of Chicago and has had accounting circumstances of any given pattern must be training at both the University of Chicago and taken into consideration. An opinion was ex­ at Loyola University. pressed that present real wages are relatively the same, if not somewhat less than in a period Tax News—Continued from Page Nine of relative non-inflation. Inflation and social welfare was the last topic their return would be only $900. Husbands of the evening. From reliable sources, it was and wives living in community property states, stated that through inflation, gifts to charitable filing joint return will be entitled to $500 each institutions become fewer in the long run. if the adjusted gross community income is in However, the students did not quite agree and excess of $1000. The limitation on medical ex­ brought up a case where a local church re­ penses is computed on medical expenses in ex­ cently paid off a $125,000 mortgage with do­ cess of 5% of adjusted gross income. The nations. Here income tax deductions probably limitations on charitable contributions is based had a great deal to do with it. Several com­ upon 15% of adjusted gross income. munity churches were mentioned in this con­ The amount of charitable deductions and nection. medical deductions may be a determining fac­ tor in deciding whether or not to elect to take Editor’s Note: Peggy Kalpakian is a junior the optional standard deduction or compute the at the University of Southern California where deductions in the usual manner. she is majoring in Finance and Business Ad­ Every taxpayer has the right to elect the ministration. She is vice-president of Xi of Phi standard deduction. If adjusted gross income is Chi Theta and a member of Ephebian, an hon­ less than $5000, the deduction is 10% of ad­ orary civic betterment society, membership in justed gross income. If adjusted gross income which is given to the upper 2.5% of high is in excess of $5000, the standard deduction school graduating class. She is also a part-time is limited to $500. If the taxpayer’s income is employee of The Security-First National Bank less than $5000, and he elects to use the stand­ of Los Angeles in the Escrow Department and ard deduction, then he pays the alternative office assistant in the office of the Dean of the tax, using the table on the optional tax forms. College of Commerce, U.S.C. The decision to use the standard deduction in Thanks, Peggy, and best wishes for a world any year cannot be revoked for that year. A of success. Certainly, the career of one so taxpayer might find that he should have saved promising will be followed with keen interest. by using his normal deductions, but cannot change his decision for that year. So extreme Coast-to-Coast—Continued from Page Five care should be used in arriving at correct ad­ want to stay there permanently if post-war justed gross income, and an accurate compu­ jobs are available for them. It is highly neces­ tation of ordinary deductions for net income, sary that some sort of blueprint for the future should be made before electing to use the be prepared so that the population shall have standard deduction.

[11] What’s New in Reading

ALMA E. RASMUSSEN, C.P.A., Chicago, Illinois

The Rest of Your Life—by Leo Cherne. Auditing Standards and Procedures in the Light Publisher—Doubleday, Doran and Company— of Court Decisions. Price $2.75. 291 pages. An article by Frederick K. Rabel, C.P.A., An entertaining and stimulating prophesy by in the July number of the Journal of Ac­ the Executive Secretary of the Research Insti­ countancy. tute of America as to what the post war world Mr. Rabel divides the audit into fourteen may be like. Not too optimistic as to how far classifications, some of which are — General we will have moved toward the solution of our Purpose of the Audit; Testing and Sampling basic problems by war’s end. Method; Knowledge of Legal Matters; Effects The rubber question posed by the author of Terms of Audit Agreement. Under each of illustrates one of the many problems which the classifications he reviews decisions of Amer­ will confront us. With plants equipped to pro­ ican and British courts relating to the duties duce one-third more synthetic rubber than our and responsibilities of the independent auditor. largest prewar civilian needs for rubber, what are we to do about imports of natural rubber? 1944 Tax Diary and Manual And what about tariffs and subsidies? Upon Publisher—Prentice-Hall—Price $4.25. our decisions on this and similar problems will depend jobs and our standard of living. And This 387-page volume contains charts show­ are we to decide these questions with a short­ ing taxes imposed by each State, with sum­ term or long-term view? A prophesy as to final maries of the laws regarding them, as well as disposition of government-owned plants—"it charts of Federal taxes. There is also a diary will be surprising if some mixed corporations section showing last days for payment of all aren’t formed in which the ownership is held Federal and State taxes. A useful book for pub­ jointly by the private management and govern­ lic accountants, as well as for businesses hav­ ment.” ing branches or subsidiaries in more than one Mr. Cherne discusses many other questions State. which will require answers soon after war’s end, such as whether enough useful jobs can Production, Jobs and Taxes — by Harold M. Groves. be provided by either private business or gov­ ernment. And can small business survive? He Publisher—McGraw-Hill — Price $1.25 — 112 tells us that aside from loans by government pages. and its agencies, we in the United States de­ "A Research Study of the Committee for pended on government for more than eighteen Economic Development,” this books deals with per cent of our entire national income in 1940. post war revision of Federal taxes as a neces­ One hundred years ago sixteen out of every sary step toward the achievement of our Na­ twenty people in America owned the means by tional goal of a higher standard of living which they made their living—today seventeen through increased production and employment. out of twenty don’t. Labor unions and the part Among other changes, integration of corpo­ they will play are the subject of one chapter. rate and personal taxes is recommended, thus The housing problem and what our new doing away with the present duplication of homes will be like are discussed under the prov­ taxes on dividends. It is the author’s belief that ocative chapter heading "Six Million Bathtubs.” this one change would effect either a reduction The wonderful developments in medical science in prices, increase in wages, or increases in cor­ —airplanes—helicopters—streamlined automo­ porate profits with consequently increased divi­ biles—are covered. dends to stockholders, or all three of these most But we are reminded that before the possible desirable results. super-world is an accomplished fact there will Increase in the carry-over period for net be a transition period with probable extensive business losses is suggested, as well as changes unemployment and depression, and that the re­ in present allowances for depreciation and sponsibility for shortening that period of tran­ obsolescence. sition and minimizing its effects is ours! Please turn to Page Fifteen

[ 12 ] Ruth A. Clark, though a resident of California for many years, is a native of Pennsylvania where she attended Indiana State Normal School at Indiana. She enjoys a wide variety of activities and is prominently identified with accounting societies, being past president of Los Angeles Chapter ASWA, a member of the California Society of Certified Public Accountants, and an associate member of the American Institute of Accountants. She is also member of the Hollywood Business and Professional Women’s Club.

——Accounting for Interstate Motor Carriers------RUTH A. CLARK, C.P.A., Los Angeles, California

Under date of August 9, 193 5, the 74th formity with the carrier’s books of accounts Congress passed the Motor Carrier Act of 193 5 and every inquiry contained therein must be delegating to the Interstate Commerce Com­ definitely and completely answered. mission, Bureau of Motor Carriers, the power The Interstate Commerce Commission found to regulate Interstate Motor Carriers. Incorpo­ the Uniform System of Accounts to a great rated under Section 204 (a) is the authority extent valuable in regulating railroads. It was to prescribe a Uniform System of Accounts. thereafter used to regulate other utilities and Subsequently, on the 29th day of November has been adopted by other State and Federal 1937, a General Order was issued by the Inter­ regulatory bodies. It has been found useful not state Commerce Commission requiring all Class only for the purpose of obtaining accurate sta­ I Carriers to adopt a Uniform System of Ac­ tistical information and statements showing the counts, effective January 1, 193 8. Class I Car­ financial position of the carrier, but it also riers include those having average gross reve­ affords the basic cost record used in approving nues of $100,000 or more per annum from tariffs. Tariffs authorized by the Interstate intrastate and interstate motor carrier opera­ Commerce Commission must be based on actual tions combined. Three years is used as the basis costs, not on estimates. for determining the average gross revenue. Due to the powers delegated the Interstate Sections 220 (a) and 222 (g) of the Act Commerce Commission by the legislature, it is gives the Interstate Commerce Commission the mandatory that the carrier comply with the authority to require annual, periodical, and rules and regulations as set forth in the Uni­ special reports from all motor carriers and to form System of Accounts. Hence, accounting prescribe the manner and form in which such for Motor Carriers under interstate regulation reports shall be rendered. Pursuant to the au­ is very technical and to a great extent special­ thority granted, the Commission ordered Class ized. Consequently, it is the accountant’s duty I carriers to submit a brief quarterly report of to acquire sufficient knowledge of the Uniform Revenues, Expenses and Statistics and a more Sysetm of Accounts so that he may properly detailed Annual Report. interpret these rules and regulations. Further­ Completed reports must be in exact con­ more, it is quite essential and very important

[13] that the accountant, in addition to his knowl­ 1261 Miscellaneous Equipment edge of accounting, have a general knowledge 1271 Improvements to Leasehold of transportation, rate and tariff structures and Property be familiar with all the provisions of the Act. 1281 Undistributed Property The Uniform System of Accounts provides 1291 Unfinished Construction a Chart of Accounts to be maintained together 1300 Carrier Operating Property Leased with a list of definitions of terms used and in­ to Others structions relative to the fundamental general 1400 Non-Carrier Operating Property accounting principles to be applied in connec­ 1450 Non-Operating Property tion therewith. Intangible Property: Instructions as to just what items are to be 1500 Organization, Franchises, and recorded in each account, together with a Form Permits of Balance Sheet Statement and a Form of In­ 1501 Organization come Statement, are a part of the system. The 1511 Franchises Chart is so arranged that the compilation of 1541 Patents periodic Balance Sheets and Income Statements 1550 Other Intangible Property as well as the quarterly and annual reports gen­ Investment Securities and Advances: erally presents a minimum number of problems. 1600 Investments and Advances— Additional Orders have been issued from Associated Companies time to time modifying the original Chart of 1650 Other Investments and Advances Accounts. Instructions and interpretations of Special Funds: the regulations relative to the preparation of 1701 Sinking Funds the quarterly and annual reports have been 1751 Depreciation Funds periodically forwarded to the carriers. 1781 Miscellaneous Special Funds Listed below are the numbers and titles of Deferred Debits: the primary accounts contained in the original 1800 Prepayments schedule: 1880 Unamortized Debt Discount and Expense Balance Sheet Accounts 1890 Other Deferred Debits Miscellaneous Debit Items: ASSETS 1900 Discount on Capital Stock Current Assets: 1910 Commission and Expense on 1000 Cash Capital Stock 1020 Working Funds 1920 Reacquired Securities 1040 Special Deposits 1990 Nominally Issued Securities 1041 Interest Special Deposits 1042 Dividend Special Deposits LIABILITIES 1043 Miscellaneous Special Current Liabilities: Deposits 2000 Notes Payable 1060 Temporary Cash Investments 2020 Matured Equipment and Long- 1080 Notes Receivable Term Obligations 1100 Receivables from Associated 2030 Payables to Associated Companies Companies 2050 Accounts Payable 1120 Accounts Receivable 2070 Wages Payable 1140 Subscribers to Capital Stock 2090 C.O.D.’s Unremitted 1160 Interest and Dividends Receivable 2100 Dividends Declared 1180 Material and Supplies 2120 Taxes Accrued 1190 Other Current Assets 2150 Interest Accrued Tangible Property: 2160 Matured Interest 1200 Carrier Operating Property 2190 Other Current Liabilities 1201 Land and Land Rights Advances Payable: 1211 Structures 2200 Advances Payable—Associated 1221 Revenue Equipment Companies 1231 Service Cars and Equipment 2250 Other Advances Payable 1241 Shop and Garage Equipment Equipment and Other Long-Term 1251 Furniture and Office Obligations: Equipment 2300 Equipment Obligations

[14] 2330 Bonds 53 50 Equipment Rents—Credit 2360 Other Long-Term Obligations 5360 Rent from Owned Land Deferred Credits: and Structures 2400 Unamortized Premium on Debt 5370 Sublease Rental Income 2450 Other Deferred Credits 5390 Joint Facility Rents— Reserves : Credit 2500 Reserve for Depreciation—Carrier 5400 Rent for Lease of Carrier Operating Property Property—Debit 2600 Reserve for Amortization-Carrier 5500 Income from Lease of Carrier Operating Property Property—Credit 2610 Reserve for Depreciation and 6000 Net Income from Non-Carrier Amortization—Other Property Operations 2650 Reserve for Uncollectible Accounts 6100 Net Income from Non-Operating 2660 Insurance Reserves Property 2680 Injuries, Loss and Damage Reserves 6200 Interest Income 2690 Other Reserves 6300 Dividend Income Capital Stock: 6400 Income from Sinking and Other 2700 Preferred Capital Stock Funds 2710 Common Capital Stock 6500 Other Non-Operating Income 2720 Premiums and Assessments on 7000 Interest on Long-Term Obligations Capital Stock 7100 Other Interest Deductions 2730 Capital Stock Subscribed 7200 Taxes Assumed on Interest Noncorporate Capital: 7300 Amortization of Debt Discount 2800 Sole Proprietorship Capital and Expense 2810 Partnership Capital 7400 Amortization of Premium on Unappropriated Surplus: Debt—Credit 2900 Unearned Surplus 7500 Other Deductions 2930 Earned Surplus 8000 Provision for Income Taxes 8010 Federal Income Tax Income Accounts 8020 Federal Excess Profits Tax 3000 Operating Revenues 8030 Federal Surtax on 4000 Operation and Maintenance Undistributed Profits Expenses 8040 Other Federal Income Taxes 4100 Equipment Maintenance 8050 State Income Taxes and Garage Expense 8060 Other Income Taxes 4200 Transportation Expense - 4300 Terminal Expense What’s New in Reading—Con. from Page 12 4400 Sales, Tariff and Advertising Expense Where's the Money Coming From?—by Stuart 4500 Insurance and Safety Chase Expense Publisher—The Twentieth Century Fund — 4600 Administrative and General Price $1.00—179 pages. Expense The third in a series of six books under the 5000 Depreciation Expense general heading, "When the War Ends,” this 5100 Amortization Chargeable volume discusses the problem of post war to Operations finance. The author points out that gradually 5110 Amortization of Carrier we have come to live in a "disaster economy,” Operating Property where waste and loss are virtues, while thrift 5120 Property Loss Chargeable and good quality depress, rather than stimu­ to Operations late, trade. 5200 Operating Taxes and Licenses The tremendous government debt and its 5300 Operating Rents—Net effect on our economy is discussed, as is also 5310 Equipment Rents—Debit the necessity for full employment and the 5320 Other Operating Rents— means of attaining it. According to Mr. Chase, Debit we can better afford a higher standard of liv­ 5340 Joint Facility Rents—Debit ing than we can afford not to attain it.

[ 15 ] The WOMAN C. P. A. 395 ALTOONA PLACE, S.W.

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