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

To change gross income, someone would need to:

Modify the net sales by changing discounts offered to customers

Adjust the amount of sales returns and allowances

Alter the cost of goods sold

Increase or decrease total sales revenue before deducting returns, allowances, and discounts

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Verified step by step guidance

Understand the concept of gross income: Gross income is calculated as total sales revenue before deducting returns, allowances, and discounts, minus the cost of goods sold (COGS).

Identify the components that affect gross income: These include net sales (total sales revenue minus returns, allowances, and discounts) and the cost of goods sold (COGS).

To modify net sales, consider adjusting discounts offered to customers. For example, reducing discounts will increase net sales, while increasing discounts will decrease net sales.

Adjust the amount of sales returns and allowances. Reducing returns and allowances will increase net sales, while increasing them will decrease net sales.

Alter the cost of goods sold (COGS). Lowering COGS will increase gross income, while raising COGS will decrease gross income. This can be achieved by managing production costs, purchasing costs, or inventory valuation methods.