Multiple Choice
Which of the following is not deducted from gross sales to calculate net sales?
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4. Merchandising Operations
Net Sales
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If a company has sales revenue of \$600, sales returns and allowances of \$50, and sales discounts of \$10, what is the net sales amount?
A
\$650
B
\$560
C
\$540
D
\$600
Verified step by step guidance1
Step 1: Understand the concept of net sales. Net sales is calculated by subtracting sales returns, allowances, and discounts from the total sales revenue.
Step 2: Identify the given values in the problem. Sales revenue is \$600, sales returns and allowances are \$50, and sales discounts are \$10.
Step 3: Write the formula for net sales: Net Sales = Sales Revenue - Sales Returns and Allowances - Sales Discounts.
Step 4: Substitute the given values into the formula: Net Sales = 600 - 50 - 10.
Step 5: Perform the subtraction step-by-step to find the net sales amount. First subtract \$50 from \$600, then subtract \$10 from the result.
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