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

Customer research helps improve company profits by increasing which of the following components related to net sales?

Sales returns

Customer satisfaction and repeat purchases

Operating expenses

Gross revenue

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

Analyze the impact of customer satisfaction and repeat purchases: Customer satisfaction leads to repeat purchases, which directly increase gross revenue. Higher gross revenue contributes to higher net sales.

Evaluate the role of sales returns: Sales returns reduce net sales. By improving customer satisfaction, companies can minimize sales returns, thereby positively impacting net sales.

Consider operating expenses: Operating expenses are not directly related to net sales. They are subtracted from gross profit to calculate operating income, so they do not influence net sales directly.

Conclude that customer satisfaction and repeat purchases are the key components related to net sales improvement, as they increase gross revenue and reduce sales returns.