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 would increase net sales on a company's income statement?

Decreasing sales returns and allowances

Increasing sales allowances

Increasing sales discounts

Increasing sales returns

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Verified step by step guidance

Understand the concept of net sales: Net sales is calculated as gross sales minus sales returns, allowances, and discounts. It represents the actual revenue earned from sales after accounting for deductions.

Analyze the impact of sales returns and allowances: Sales returns and allowances reduce the gross sales figure. Decreasing sales returns and allowances would result in a higher net sales figure because fewer deductions are made.

Evaluate the effect of sales allowances: Increasing sales allowances would decrease net sales because allowances are subtracted from gross sales.

Consider the role of sales discounts: Sales discounts also reduce gross sales. Increasing sales discounts would lower net sales as more deductions are applied.

Assess the impact of sales returns: Increasing sales returns would decrease net sales because returns are subtracted from gross sales, reducing the overall revenue.