Which of the following best describes 'Net Sales' in financial accounting?

• A. Total revenue from sales after deducting returns, allowances, and discounts.
• B. All cash received from customers before any deductions.
• C. The sum of all sales and other income sources.
• D. Total sales revenue minus cost of goods sold.

Answer: (A)

Verified step by step guidance

1. Understand the concept of 'Net Sales' in financial accounting. Net Sales refers to the total revenue generated from sales after accounting for deductions such as sales returns, allowances, and discounts.
2. Analyze the options provided in the problem. The correct description of Net Sales should align with the definition above.
3. Option 1: 'Total revenue from sales after deducting returns, allowances, and discounts' matches the definition of Net Sales. This is the correct description.
4. Option 2: 'All cash received from customers before any deductions' is incorrect because Net Sales accounts for deductions like returns, allowances, and discounts.
5. Option 3: 'The sum of all sales and other income sources' is incorrect because Net Sales pertains only to sales revenue, not other income sources. Option 4: 'Total sales revenue minus cost of goods sold' is incorrect because this calculation represents Gross Profit, not Net Sales.