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 terms refers to the amount a company receives from customers after deducting sales returns, allowances, and discounts from total sales?

Net Income

Gross Profit

Operating Income

Net Sales

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Verified step by step guidance

Understand the concept of Net Sales: Net Sales refers to the revenue a company earns from its customers after deducting sales returns, allowances, and discounts from the total sales.

Identify the components that affect Net Sales: These include Total Sales, Sales Returns, Sales Allowances, and Sales Discounts.

Calculate Net Sales using the formula: Net Sales = Total Sales - Sales Returns - Sales Allowances - Sales Discounts.

Differentiate Net Sales from other terms: Net Income refers to the company's profit after all expenses, Gross Profit is the profit after deducting the cost of goods sold, and Operating Income is the profit from core business operations.

Apply the concept to the question: The term that matches the definition provided in the question is Net Sales, as it specifically accounts for deductions like returns, allowances, and discounts from total sales.