Accounting terms – British vs American

Although Basic Principles of Accounting are almost the same all over the world but the American Accounting practices differ to some extent from the British Accounting practices. Some American terms are given below which are equivalent to British terms:

Sr. No.British TermsAmerican Terms
1GoodsMerchandise
2StockInventory
3Purchases on creditPurchases on account
4Gross ProfitGross Income
5Net ProfitNet Income
6Profit and Loss AccountIncome Statement
7Outstanding/Accrued ExpensesPayable Expenditure
8Provision for bad debtsAllowance for uncollectible
9Bad debtsUncollectible
10IncomeRevenue
11Ordinary SharesCommon Shares
12Sundry debtors / Trade debtorsAccounts Receivable
13Sundry creditors / Trade creditorsAccounts Payable
14Bills PayableNotes Payable
15Bills ReceivableNotes Receivable
16Accounting periodFiscal period
17Accounting yearFiscal year
18CapitalOwner’s Equity
19CompanyCorporation
20ShareholderStockholder
21ShareStock
22Bonus shareStock dividend
23Preference sharesPreferred stock
24Paid up capitalPaid in capital
25Profit and loss appropriation A/cRetained Earnings
26Credit NoteCredit memo

 

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