Multiple Choice
Profit equals total __ minus total __.
27
views
4. Merchandising Operations
Net Sales
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Sales less sales discounts, less sales returns and allowances equals:
A
Net Sales
B
Cost of Goods Sold
C
Operating Income
D
Gross Profit
Verified step by step guidance1
Understand the concept of Net Sales: Net Sales is calculated by subtracting sales discounts and sales returns and allowances from total sales. It represents the actual revenue generated from sales after accounting for these deductions.
Identify the components: Sales discounts are reductions in price offered to customers, often for early payment. Sales returns and allowances represent refunds or reductions in price due to defective goods or other issues.
Apply the formula for Net Sales: Net Sales = Total Sales - Sales Discounts - Sales Returns and Allowances. This formula helps determine the revenue after adjustments.
Compare Net Sales to other terms: Cost of Goods Sold refers to the direct costs of producing goods sold by a company. Operating Income is the profit earned from normal business operations. Gross Profit is calculated as Net Sales minus Cost of Goods Sold.
Conclude that the correct term matching the description in the problem is Net Sales, as it directly results from the calculation described.
9:04mWatch next
Master Net Sales:Sales Discounts (Gross Method) with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
