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

• A. Gross sales, sales returns and allowances, sales discounts
• B. Gross profit, cost of goods sold, operating expenses
• C. Net income, total assets, total liabilities
• D. Accounts receivable, cash sales, inventory

Answer: (A)

Verified step by step guidance

1. 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.
2. 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).
3. 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.
4. Step 4: Write the formula for net sales calculation. The formula is: $\mathrm{Net}\mathrm{Sales}=\mathrm{Gross}\mathrm{Sales}-\mathrm{Sales}\mathrm{Returns}-\mathrm{Sales}\mathrm{Discounts}$
5. 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.