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Multiple Choice
If sales increase by \$50 and there are no changes in sales returns, allowances, or discounts, what is the effect on net sales?
A
Net sales increase by \$50
B
Net sales remain unchanged
C
Net sales decrease by \$50
D
Net sales increase by less than \$50
Verified step by step guidance
1
Understand the concept of net sales: Net sales are calculated as gross sales minus sales returns, allowances, and discounts.
Identify the given information: Sales increase by $50, and there are no changes in sales returns, allowances, or discounts.
Analyze the impact: Since there are no changes in sales returns, allowances, or discounts, the entire $50 increase in sales directly affects net sales.
Conclude the relationship: Net sales will increase by the same amount as the increase in sales, which is $50.
Verify the reasoning: Ensure that no other factors (e.g., returns, allowances, or discounts) are affecting the calculation, confirming that net sales increase by $50.