Accounting Terms – British vs American

Written by True Tamplin, BSc, CEPF®

Updated on December 29, 2022

Although Basic Principles of Accounting are almost the same all over the world, 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

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.