Multiple Choice
Which of the following best describes 'Net Sales' in financial accounting?
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4. Merchandising Operations
Net Sales
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Graff Inc. has total sales of $49,800. If the company had sales returns and allowances of $1,200 and sales discounts of $600, what is the net sales amount?
A
$48,600
B
$48,000
C
$49,800
D
$49,200
Verified step by step guidance1
Step 1: Understand the concept of net sales. Net sales is calculated by subtracting sales returns and allowances, as well as sales discounts, from total sales.
Step 2: Identify the given values in the problem. Total sales = $49,800, Sales returns and allowances = $1,200, Sales discounts = $600.
Step 3: Write the formula for net sales: Net Sales = Total Sales - Sales Returns and Allowances - Sales Discounts.
Step 4: Substitute the given values into the formula: Net Sales = $49,800 - $1,200 - $600.
Step 5: Perform the subtraction step by step to find the net sales amount. First subtract $1,200 from $49,800, then subtract $600 from the result.
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