Edward Preston Moxey Jr. (October 2, 1881 – April 6, 1943The Certified Public Accountant, Vol. 23. (1943), p. 20. ) was an American accountant, and the first Professor of Accounting at the Wharton School of Finance and Commerce at the University of Pennsylvania.Matz, Adolph. "Edward P. Moxey, Jr." The Accounting Historians Journal (1976): 63-68. (Jstor stable link) He is known for his early works on cost-keeping in factories, which describe the elementary principles of cost accounting.Academy of Accounting Historians (1979). Working Paper Series. Vol. 2. p. 101.
Biography Born in Philadelphia to Edward P. and Mary Ann, Moxey was named after his father. He was a banker, broker, businessman and accountant, had founded the Edward P. Moxey accountancy firm, and had published the 1881 book, entitled "Fluctuations of the New York stock market, 1870–1880." Moxey obtained his BS in economics in 1904, his MA in 1906, and his PhD at the University of Pennsylvania in 1909. Subsequently, he obtained his Certified Public Accountants license in 1913 for the state of Pennsylvania.
After his graduation Moxey joined the accountancy firm Edward P. Moxey & Co, where he became a partner in 1911. After his father's death in 1915, he took over the prestigious accounting firm.Steven A. Sass (1982). The pragmatic imagination: a history of the Wharton School, 1881–1981. p. 168 The firm would eventually merge into Coopers & Lybrand in 1962.Coopers & Lybrand. Journal, Volume 43, 1962. p. 69. Moxey had started at the University of Pennsylvania as an Assistant Instructor in 1904,Cornell March Dowlin. The University of Pennsylvania today: its buildings, departments & work. University of Pennsylvania press, 1940. p. 53 became an instructor in 1907, Assistant Professor in 1910, and Full Professor in 1915.American Association of Collegiate Schools of Business (1940) Faculty Personnel. Vol. 5. p. 220 At the Wharton School of Finance and Commerce he was the first to be appointed Professor of Accounting, and the first chairman of its Accounting department.Carl Thomas Devine, Harvey S. Hendrickson (1999). Carl Thomas Devine: Essays in Accounting Theory : a Capstone. p. 278
Moxey was co-founder of the National Association of Cost Accountants,Michael Chatfield, Richard Vangermeersch (eds.) The History of Accounting (RLE Accounting): An International Encyclopedia 2014. p. 334. board member and co-founder of its Philadelphia chapter and its president in 1929–31.
Moxey's son, Edward P. Moxey, III, graduated from Wharton in 1930 and followed his father's and grandfather's footsteps and became a third generation CPA. He worked for Philco-Ford Corporation, later Ford Aerospace, and taught at Temple University.
Work Accounting at the Wharton School Moxey had joined the Wharton School faculty in the early 1900s. A 1904 article in the Bulletin of the American Institute of Banking reports, that under Moxey Jr., a class in bookkeeping was organized for those without previous experience. The class completed the first set of books in the elementary work, and at the beginning of the second half would take up first year accounting, to be prepared to take advanced accounting in the second year.American Institute of Banking. Bulletin, Vol. 4. American Institute of Banking., 1904. p. 1096.
The teaching in accounting had been organized within the Wharton School since its initiation. Joseph Wharton had agreed upon this in its initial plan, which had stated that "one professor or instructor of accounting or bookkeeping [should] teach the simplest and most practical forms of bookkeeping for housekeepers, for private individuals, for commercial and banking firms, for manufacturing establishments, and for banks; also, the modes of keeping accounts by executors, trustees, and assignees, by the officials of towns and cities, as well as by the several departments of a State or National Government; also, the routine of business between a bank and a customer."See also: "Plan of the Wharton School", in: Education of Business Men. (1891) p. 30
In his second year at the Wharton School (1905–06) Moxey taught three regular accounting courses, entitled "Elementary Accounting", "Accounting Systems", and "C.P.A. Problems."
Accounting Systems (1911)
In 1911 Moxey's first book Accounting Systems was published by the Alexander Hamilton Institute. This work was part of a twelve-volume series on Modem Business, and was written for a particular clientele. The series is designed for home study, partly as the basis for correspondence work, but more generally used as a comprehensive treatment of business organization and methods for persons studying by themselves without personal intercourse with an instructor.Henry Rand Hatfield. "Reviewed Works: Accounting Systems by Edward P. Moxey, Jr.; Auditing and Cost Accounts: Part I: Auditing by Seymour Walton; Auditing and Cost Accounts: Part II: Cost Accounts by Stephen W. Gilman." in: Journal of Political Economy, Vol. 20, No. 8 (Oct., 1912), pp. 858-861
In a 1912 review by Henry Rand Hatfield in Journal of Political Economy, Hatfield explained, that "for such it would seem an almost indispensable feature that there be furnished a convenient, yet fairly comprehensive, list of collateral references. Even in the college classroom, where text can readily be amplified by suggestions or criticisms of the instructor, the use of collateral references is well-nigh universal. Much more important is it that the isolated student should be encouraged to compare other, perhaps conflicting, views. Furthermore, the interested student constantly desires to branch out and make a more intensive study of some topic, touched upon in a general treatise but in such a work necessarily given but scant attention."
In the 1912 review Hatfield further explained, that the subject matter of the volumes is in general very well presented. Moxey, in the volume on accounting systems, presents in some considerable detail general systems of accounts adapted respectively to the needs of building and loan associations, life and fire insurance companies, department stores, gas companies, railroads, street railways, and municipalities. To these are added chapters on bank accounting by Howard Jefferson, on brewery accounting by Otto A. Grundmann, and on accounts of executors and administrators by Harold D. Greeley. Hatfield commented, that "if any criticism is to be made it might be that somewhat too much attention is given to details of forms, and too little emphasis is laid on the particular features which logically require differently ordered accounting systems."
And furthermore Hatfield (1912) noted, that "it seems almost gratuitous to print forms of a customer's check, a bank draft, and a deposit ticket. The purchase of supplies is not particularly different in a department store from that in a gas company, or a street railway, so there is some repetition in describing the handling of purchases in each of these institutions. Voucher payments and pay-rolls are not referred to in the discussion of department stores, but are described in connection with gas companies as if particularly connected with the latter industry. The chapter on municipal accounts is the least satisfactory; that on department stores is particularly clear and interesting."
Principles of Factory Cost Keeping (1913)
In the preface of the 1913 "Principles of Factory Cost Keeping", Moxey started to explain, that the literature in which an activity finds its expression depends upon the interest in, and the development of, that activity. It was according to Moxey therefore not surprising to find that there was comparatively little literature on accounting in his days.Moxey 1913 p. iii-iv Charles Waldo Haskins had said: "The literature of accounting is virtually in its infancy, awaiting the fostering care of cultured authorship."
Haskins' statement was particularly applicable to the subject of cost accounting. Although many valuable articles had been written on different phases of this subject, and while excellent books on costs had appeared from time to time, it was a notable fact that such articles and such books have been either of a highly technical character, or otherwise treating of special systems of costs as actually installed and used by certain manufacturing plants.
As a result of this, according to Moxey, in his day there existed in many minds the idea that the principles of cost accounting were more or less mysterious and vague, and that the subject is one for the expert, only to be understood after years of study and experience. This idea is due largely to the lack of a clear and simple presentation of the principles upon which cost accounting rests; and it is to supply this need that the present book has been prepared.
Moxey admitted that the use of diagrams in illustrating the principles of cost accounting is not new. They were used quite successfully in the early 1880s by Emile Garcke and John Manger Fells in their book "Factory Accounts"; but the idea had been further developed by Moxey, and had been made applicable to conditions of his day.
Moxey ended his preface by stating that "the book offered to those interested along cost accounting lines, with the hope that it may help to a clearer understanding of the true aims of this important branch of accounting science."
The purpose of cost keeping Moxey (1913) explained that there are two reasons which warrant the keeping of cost records and which justify the consequent expense involved.Moxey (1913, p. 8) 1) Cost keeping furnishes the manufacturer with accurate and reliable information concerning the costs incurred in production, enabling him to fix prices and bid intelligently against others in the same field. 2) Through his cost accounting department the manufacturer is enabled to detect, locate, and eliminate waste or leakage in materials, labor, and other expenses incident to production.
Analysis of General Ledger A system of accounting, according to Moxey, should go beyond the elementary presentation of facts to furnish information sufficient and accurate enough for the requirements of modern business. Some classes of expense are not of a temporary nature. The use of certain articles in production such as machinery extends over a series of years. It is not right to charge the original cost of such purchases to profit and loss in the period in which they are made, for they will figure in the manufacture of hundreds of subsequent lots of goods. In his Principles of Factory Cost Keeping (1913) Moxey proposes a system, which is based on the following basic distinctions:Moxey 1913 p. 9-11
Temporary and Permanent Expenditures : For cost accounting purposes, therefore, a first distinction considering expenditures only for the present must be made between expenditures for assets of a more permanent type generally known as fixed assets, and comprehended in the term "Plant" and those of a more or less temporary character, known as "Profit and Loss" items, or those comprehended in the general class of "Nominal Accounts." Classification of Merchandising Expenditures : Following this a more detailed classification becomes desirable. Taking a merchandising concern for the sake of illustration, we find that "Profit and Loss" expenditure is divided into two parts, the distinguishing feature being the difference between payments for that which is dealt in, classified under the heading "Merchandise", and payments for services and other items necessary to the proper conduct of the business, known as "General Expense."