On a Multiple-Step Income Statement,what Happens to the Amount of Sales

question 129

Multiple Choice

On a multiple-step income statement,what happens to the amount of sales returns and allowances?

• A)it is subtracted from net sales to determine gross margin on sales.
• B)it is subtracted from gross margin on sales to determine net sales.
• C)it is added in the calculation of cost of goods sold.
• D)it is subtracted from gross sales to determine net sales.

---

Definitions:

Sharecroppers

Laborers who farm land owned by another person and pay rent either in cash or as a portion of the crop, commonly in the post-Civil War South in the United States.

Cotton

A soft, fluffy staple fiber that grows in a boll around the seeds of cotton plants, used in the textile industry.

Cotton Production

The cultivation and harvesting of cotton plants, primarily for the textile industry, historically a major driver of the economy, especially in the American South.