Accounting terms – British vs American

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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 Terms American Terms
1 Goods Merchandise
2 Stock Inventory
3 Purchases on credit Purchases on account
4 Gross Profit Gross Income
5 Net Profit Net Income
6 Profit and Loss Account Income Statement
7 Outstanding/Accrued Expenses Payable Expenditure
8 Provision for bad debts Allowance for uncollectible
9 Bad debts Uncollectible
10 Income Revenue
11 Ordinary Shares Common Shares
12 Sundry debtors / Trade debtors Accounts Receivable
13 Sundry creditors / Trade creditors Accounts Payable
14 Bills Payable Notes Payable
15 Bills Receivable Notes Receivable
16 Accounting period Fiscal period
17 Accounting year Fiscal year
18 Capital Owner’s Equity
19 Company Corporation
20 Shareholder Stockholder
21 Share Stock
22 Bonus share Stock dividend
23 Preference shares Preferred stock
24 Paid up capital Paid in capital
25 Profit and loss appropriation A/c Retained Earnings
26 Credit Note Credit memo

 

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