Multiple Choice
If a company sells 20 video games at a list price of \$50 each, offers sales discounts of \$5 per game, and has sales returns totaling \$100, what is the net sales revenue from these transactions?
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4. Merchandising Operations
Net Sales
Multiple Choice
Which of the following best represents the inflow of funds into a business, commonly referred to as net sales?
A
Total cost of goods sold during the period
B
Total sales revenue minus sales returns, allowances, and discounts
C
Total operating expenses incurred by the business
D
Total sales revenue before any deductions
Verified step by step guidance1
Understand the concept of net sales: Net sales represent the actual revenue a business earns from its sales activities after accounting for deductions such as sales returns, allowances, and discounts.
Identify the components of net sales: Net sales are calculated by taking the total sales revenue and subtracting sales returns, allowances, and discounts.
Analyze the options provided: Evaluate each option to determine which one aligns with the definition of net sales.
Eliminate incorrect options: For example, 'Total cost of goods sold' and 'Total operating expenses' are not related to net sales, as they pertain to costs and expenses rather than revenue. Similarly, 'Total sales revenue before any deductions' does not account for the necessary deductions to calculate net sales.
Select the correct answer: The correct representation of net sales is 'Total sales revenue minus sales returns, allowances, and discounts.'
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