Net Sales

question 70

Multiple Choice

Net sales:

• A)is determined by adding total sales for the accounting period
• B)is calculated once profit after all expenses are paid
• C)is determined once profit after cost of goods sold is deducted
• D)deducts sales discount and returns and allowances from gross sales deducting sales discount and returns and allowances from gross sales
• E)is calculated by deducting revenues from gross sales

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Definitions:

Source of Cash

Any activity or operation within a business that generates cash inflow.

Inventory Acquisition

The process of obtaining and adding goods or materials to a company's stock for further sale or use.

Cash Increase

An uptick in the amount of liquid assets (cash and cash equivalents) that a company or individual has on hand.

Current Ratio

Current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, by comparing current assets to current liabilities.