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

The loyalty of customers to a business is called _____, and it can have a significant impact on net sales.

gross profit

accounts receivable

net income

customer retention

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Verified step by step guidance

Understand the concept of customer retention: Customer retention refers to the ability of a business to retain its customers over time. It is a key factor in maintaining consistent revenue and profitability.

Analyze the impact of customer retention on net sales: Loyal customers are more likely to make repeat purchases, which directly contributes to net sales. High customer retention reduces the need for extensive marketing efforts to acquire new customers.

Differentiate customer retention from other financial terms: Gross profit refers to the difference between sales revenue and the cost of goods sold. Accounts receivable represents money owed to the business by customers. Net income is the profit after all expenses are deducted. Customer retention is distinct as it focuses on maintaining customer loyalty.

Recognize the importance of customer retention in financial accounting: Businesses often measure customer retention rates to assess the effectiveness of their strategies in maintaining customer loyalty and its impact on financial performance.

Apply this understanding to the problem: The loyalty of customers to a business is referred to as customer retention, which plays a significant role in influencing net sales by ensuring repeat business and reducing customer acquisition costs.