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

Which of the following is needed to prepare a sales budget?

Total cost of goods sold

Projected net sales for the period

Depreciation expense

Ending inventory balance

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Verified step by step guidance

Understand the purpose of a sales budget: A sales budget is a financial plan that estimates the expected sales revenue for a specific period. It is typically based on projected net sales, which are the anticipated sales after accounting for returns, allowances, and discounts.

Identify the key input for preparing a sales budget: The projected net sales for the period is the primary input needed to prepare a sales budget. This figure helps estimate the revenue that the company expects to generate during the budgeted period.

Clarify why other options are not relevant: Total cost of goods sold, depreciation expense, and ending inventory balance are not directly used to prepare a sales budget. These items are more relevant to other budgets, such as the cost of goods sold budget, operating expense budget, or inventory budget.

Recognize the relationship between sales and other budgets: While the sales budget is based on projected net sales, it serves as the foundation for other budgets, such as the production budget, which depends on sales estimates to determine the required production levels.

Summarize the importance of accurate sales projections: Accurate sales projections are crucial for preparing a reliable sales budget, as they impact the company's overall financial planning and resource allocation.