Net sales is calculated by:
A) Subtracting cost of sales from sales.
B) Subtracting sales returns and sales discounts from sales.
C) Subtracting sales returns, cost of sales, and sales discounts from sales.
D) Subtracting gross profit from sales.

Question

Quizplus · Accepted Answer

Net sales is calculated as the total amount of sales minus the sales returns and sales discounts. This formula gives a company an accurate measure of how much revenue it generates from its sales activities. Subtracting cost of sales or gross profit does not give a true measure of net sales.

Net Sales Is Calculated By