Multiple Choice
The loyalty of customers to a business is called _____, and it can have a significant impact on net sales.
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4. Merchandising Operations
Net Sales
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
When revenue is greater than expenses for the period, the result is:
A
Net income
B
Gross profit
C
Net loss
D
Net sales
Verified step by step guidance1
Understand the key terms: Revenue refers to the total income generated from normal business operations, while expenses are the costs incurred to generate that revenue.
Recall the formula for determining the result of operations: Net Income (or Net Loss) = Revenue - Expenses.
Analyze the scenario: If revenue is greater than expenses, the difference (Revenue - Expenses) will be a positive value.
Interpret the positive result: A positive value indicates that the business has earned more than it spent, which is referred to as 'Net Income.'
Eliminate incorrect options: 'Gross profit' refers to revenue minus the cost of goods sold (not all expenses), 'Net loss' occurs when expenses exceed revenue, and 'Net sales' refers to total sales revenue after deductions like returns and allowances.
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