Abstract The American Institute Committee on terminology has recently advocated a study of possible substitutes for "surplus," and it may be that the 1948 executive committee has found an acceptable answer. The 1948 statement includes a section on financial statements wherein are gathered all observations on. the form and content of income statements and balance sheets. Many of the same comments were made by the 1941 statement, but they were scattered throughout the text under other headings. Several of the 1948 suggestions are new, however, and deserve particular attention. The remark that "the income statement should reveal the amount of cost assigned to expense by reason of any reduction of an inventory to its recoverable cost" may be applauded. Two considerations should be kept in mind. The first is that it is most difficult to distinguish between the judgmental errors of accountants and those of management. The second consideration is that the accountant is continually accused of being unrealistic, dogmatic, and academic.
Herbert F. Taggart (Sat,) studied this question.