This chapter discusses the distinct business entity, continuity of the entity, equality of assets and equities, the representation of financial condition by statements of assets and equities, invariance of the unit of account, the initial propriety of cost as a measure of value, the transfer of values in the transformation of goods and services, the propriety of accrual accounting and timing conventions arc. Its reviewer in the Journal of Accountancy of April, 1923, found little that was unusual and devoted one-third of the space to some argument about explanations of the difference between balance sheet presentations in Britain and the United States. The publication of Accounting Theory in 1922 was potentially epoch making, William Andrew Paton's treatment of counting cut through the technical bookkeeping treatment of many of the earlier texts. Corporate business had arrived, to stay; and Paton was among the first to link accounting with the problems of choice confronting business managers, as distinct from investors and creditors.