Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

When revenue is greater than expenses for the period, the result is:

Net income

Gross profit

Net loss

Net sales

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Verified step by step guidance

Understand the key terms: Revenue refers to the total income generated from normal business operations, while expenses are the costs incurred to generate that revenue.

Recall the formula for determining the result of operations: Net Income (or Net Loss) = Revenue - Expenses.

Analyze the scenario: If revenue is greater than expenses, the difference (Revenue - Expenses) will be a positive value.

Interpret the positive result: A positive value indicates that the business has earned more than it spent, which is referred to as 'Net Income.'

Eliminate incorrect options: 'Gross profit' refers to revenue minus the cost of goods sold (not all expenses), 'Net loss' occurs when expenses exceed revenue, and 'Net sales' refers to total sales revenue after deductions like returns and allowances.