In performing a vertical analysis, the base for sales returns and allowances is:
A) sales discounts.
B) sales.
C) gross profit.
D) net sales.

Question

Quizplus · Accepted Answer

Net sales is the best base for performing a vertical analysis of sales returns and allowances because it represents the total amount of revenue generated from the sale of goods or services after deducting any returns or allowances given to customers. This allows for a more accurate analysis of the impact of returns and allowances on overall sales.

In Performing a Vertical Analysis, the Base for Sales Returns