Which of the following is true of net sales revenue?
A)It is calculated by subtracting cost of goods sold from sales.
B)It is calculated by adding sales discounts to sales.
C)It is calculated by adding sales discounts and sales returns and allowances to sales.
D)It is calculated by deducting sales discounts and sales returns and allowances from sales.

Question

Quizplus · Accepted Answer

Net sales revenue is calculated by deducting sales discounts and sales returns and allowances from sales. This gives the actual revenue earned from the sale of goods or services, after deducting any discounts or returns. Option A is incorrect as it only accounts for the cost of goods sold and not any sales discounts or returns. Option B is only considering sales discounts and not returns and allowances. Option C is adding both sales discounts and returns and allowances, which does not give the true net revenue earned.

Which of the Following Is True of Net Sales Revenue