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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following sets of numbers are required to calculate net sales for a sales forecast?

Gross sales, sales returns and allowances, sales discounts

Gross profit, cost of goods sold, operating expenses

Net income, total assets, total liabilities

Accounts receivable, cash sales, inventory

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the concept of net sales. Net sales represent the total revenue generated from sales after deducting sales returns, allowances, and discounts. It is a key figure used in financial forecasting and analysis.

Step 2: Identify the components required to calculate net sales. These components include gross sales (total sales before deductions), sales returns and allowances (refunds or reductions in price), and sales discounts (reductions in price for early payment or other reasons).

Step 3: Exclude irrelevant components. Gross profit, cost of goods sold, operating expenses, net income, total assets, total liabilities, accounts receivable, cash sales, and inventory are not directly used to calculate net sales. These are used for other financial metrics and analyses.

Step 4: Write the formula for net sales calculation. The formula is:

Net Sales = Gross Sales - Sales Returns - Sales Discounts

Step 5: Apply the formula to calculate net sales in a sales forecast. Use the given values for gross sales, sales returns and allowances, and sales discounts to compute the net sales figure.