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Home Financial Statements Difference Between Trading and Profit and Loss Account and Income Statement
 
 

Difference Between Trading and Profit and Loss Account and Income Statement:

Both income statement and trading and profit and loss account are prepared to ascertain the net result of the business concerns. Some business concerns who have adopted British Accounting System, prepare trading and profit and loss account to determine the net result of the business, while some others who have adopted American Accounting System, prepare income statement for the same purpose. Different terms are used under the two systems of accounting. Some American terms are given below which are equivalent to British terms.

1 Bad debts 1 Uncollectible accounts
2 Provision for doubtful debts 2 Allowances for doubtful accounts
3 Sundry debtors 3 Accounts receivable
4 Sundry creditors 4 Accounts payable
5 Closing stock of goods 5 Closing inventory of merchandise
6 Opening stock of goods 6 Opening inventory of merchandise
7 Gross profit 7 Gross income
8 Net profit 8 Net income
9 Trading and profit and loss account 9 Income statement
10 Bills receivable 10 Notes receivable
11 Bills payable 11 Notes payable
12 Capital 12 Owner's equity
13 Income 13 Revenue
14 Purchases on credit. 14 Purchases on account
15 Company 15 Corporation

Relevant Articles:

Income statement
Cost of Goods Sold Statement
Cost of Goods Manufactured Statement
Balance Sheet - Report Form
Difference between Income Statement and Trading and Profit and Loss Account
Adjustments and their Effect on Financial Statements
Evaluation of Financial Statements

 

 

 

 

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Financial Accounting Topics


  Introduction to Accounting
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  Transactions and Accounting Equation
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  Analysis of Business Transactions
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  Journal, Ledger and Trial Balance
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  Accounting for Bills of Exchange
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  Special Journals
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  Cash Book
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Bank Reconciliation Statement
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  Final Accounts
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  Work Sheet
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  Capital and Revenue Items
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  Valuation of Inventories
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  Accounts of Non-profit Making Organizations
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  Statement of Cash Flows
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  Accounting Ratios Analysis
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  Depreciation, Provisions and Reserves
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  Accounting Dictionary
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  Financial Calculators
 
 
 
Managerial Accounting Topics

  Financial Statements
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  Cost Volume Profit Relationship
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  Variable Costing System
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  Materials and Inventory Cost Control
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  Activity Based Costing System
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  Standard Costing and Variance Analysis
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  Balanced Scorecard
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  Capital Investment Analysis/Capital Budgeting
 
 

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