Given Gross Sales of $40,000 and Sales Returns and Allowances

question 5

Multiple Choice

Given gross sales of $40,000 and sales returns and allowances of $6,000, what are the net sales?

• A)$50,000
• B)$46,000
• C)$34,500
• D)$34,000
• E)None of these

---

Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and profit over a specific period, demonstrating the company's financial performance.

Period Cost

Expenses that are not directly tied to the production process and are charged to the period in which they are incurred.

Manufacturing Costs

Expenses related to producing goods, encompassing direct materials, direct labor, and manufacturing overhead, necessary for calculating the cost of goods sold.

Cost of Goods Manufactured

The total production cost of goods completed during a specific accounting period, including labor, material, and overhead costs.