What Is Subtracted from Sales to Arrive at Net Sales

question 93

Multiple Choice

What is subtracted from sales to arrive at net sales?

• A) Sales returns and allowances
• B) Sales discounts
• C) Both sales discounts and sales returns and allowances
• D) Neither sales discounts nor sales returns and allowances

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Definitions:

Capital

Financial resources or assets owned by a business, used to fund operations and investments.

Net Loss

A financial situation where the total expenses of a business exceed its total revenues, indicating a negative profit.

Income Summary

An account in which the revenues and expenses are summarized during the closing process, used to transfer net income or loss to owner's equity.

Net Income

The net income a company earns once all costs and taxes are deducted from its total revenues.