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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes how 'Net Sales' is calculated on an income statement?

Net income minus operating expenses

Gross sales minus cost of goods sold and operating expenses

Gross sales plus cost of goods sold

Gross sales minus sales returns, allowances, and discounts

Previous problemNext problem

Verified step by step guidance

Understand the concept of 'Net Sales': Net Sales represents the revenue generated from sales after accounting for deductions such as sales returns, allowances, and discounts.

Identify the components of Gross Sales: Gross Sales is the total revenue from all sales before any deductions.

Recognize the deductions: Sales returns are the refunds given to customers for returned goods, allowances are reductions in price due to defects or issues, and discounts are reductions in price offered to customers.

Apply the formula for Net Sales: Net Sales = Gross Sales - (Sales Returns + Allowances + Discounts).

Ensure clarity in the calculation: Subtract the total of sales returns, allowances, and discounts from the gross sales to arrive at the Net Sales figure.