Which of the following best describes a sales return in the context of net sales?

• A. A deduction from total sales when customers return previously purchased goods.
• B. A discount offered to customers for early payment.
• C. An additional charge added to the sales price for returned goods.
• D. The total amount of sales before any deductions.

Answer: (A)

Verified step by step guidance

1. Understand the concept of 'sales return': A sales return occurs when a customer returns previously purchased goods, typically due to dissatisfaction, defects, or other reasons. This results in a reduction of the seller's revenue.
2. Recognize the impact of sales returns on net sales: Net sales are calculated as total sales minus any deductions, such as sales returns, allowances, and discounts. Sales returns directly reduce the total sales figure.
3. Eliminate incorrect options: Analyze each option provided in the problem. For example, 'A discount offered to customers for early payment' refers to sales discounts, not sales returns. Similarly, 'An additional charge added to the sales price for returned goods' is incorrect because sales returns reduce revenue, not increase it.
4. Focus on the correct description: A sales return is best described as 'A deduction from total sales when customers return previously purchased goods,' as it aligns with the definition and impact on net sales.
5. Conclude the reasoning: Based on the analysis, the correct answer is the option that describes sales returns as a deduction from total sales, ensuring clarity in understanding the concept's role in financial accounting.