The income statement shows net sales, which is equal to
A) earnings before taxes minus taxes.
B) gross revenues minus returns and allowances.
C) operating income minus operating expenses.
D) operating income minus interest.
E) net sales minus cost of goods sold.

Question

Quizplus · Accepted Answer

Net sales is calculated by subtracting returns and allowances from gross revenues. This reflects the actual revenue a company generates from its sales activities after accounting for any returns or discounts provided to customers.

The Income Statement Shows Net Sales, Which Is Equal to