This chapter was written primarily for the accountant in search of accounting principles articulating with collateral interest in accounting problems, particularly lawyers, engineers, and business managers and so on. Accounting practices are being challenged by both informed and uninformed critics the motives of some being laudatory. The impact of law, especially income-tax law, business and economic influences or accounting is succinctly stated. The frequent and sometimes pernicious effect of tax laws on profit determination and profit distortion is made vivid. Historical costs are far from Perfect, as Gilman has so cogently brought out in his volume. One wishes that the author had paid some attention to the contention of some cost men and management engineers that standard costs are the only true costs; otherwise the author's treatment of inventory charges, credits and valuation is rather inclusive. The author has little respect for the last-in, first-out, and normal or base stock methods, despite their high sanction.