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

If Sarah wants to reduce her net sales amount even further, which of the following actions could she take?

Increase sales discounts offered to customers

Decrease the number of sales returns and allowances

Increase the gross sales revenue

Reduce the cost of goods sold

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Verified step by step guidance

Understand the concept of net sales: Net sales is calculated as Gross Sales Revenue minus Sales Returns and Allowances, and Sales Discounts. It represents the actual revenue earned after accounting for these deductions.

Analyze the impact of increasing sales discounts: Offering more discounts to customers will reduce the gross sales revenue, thereby decreasing the net sales amount.

Evaluate the effect of decreasing sales returns and allowances: Reducing returns and allowances would increase net sales, which is opposite to Sarah's goal of reducing net sales.

Consider the impact of increasing gross sales revenue: Increasing gross sales revenue would also increase net sales, which does not align with Sarah's objective.

Understand the irrelevance of reducing the cost of goods sold: Cost of goods sold does not directly affect net sales; it impacts gross profit instead. Therefore, this action would not help Sarah reduce her net sales amount.