BACHELOR OF BUSINESS ADMINISTRATION

Previous
Next

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Gross sales total $300, 000, one-half of which were credit sales. Sales returns and allowances of $15, 000 apply to the credit sales, sales discounts of 2 percent were taken on all of the net credit sales, and credit card sales of $100, 000 were subject to a credit card discount of 3 percent. What is the dollar amount of net sales?
A
$227, 000
B
$229, 800
C
$279, 300
D
$240, 000
Explanation: 

Detailed explanation-1: -The formula to calculate gross sales is Total Units Sold x Original Sale Price = Gross Sales. A company’s gross sales are the total sales of all its products and/or services over a period of time.

Detailed explanation-2: -Net sales is the sum of a company’s gross sales minus its returns, allowances, and discounts. Net sales calculations are not always transparent externally. They can often be factored into the reporting of top line revenues reported on the income statement.

Detailed explanation-3: -The formula for net credit sales is = Sales on credit – Sales returns – Sales allowances. Average accounts receivable is the sum of starting and ending accounts receivable over a time period (such as monthly or quarterly), divided by 2.

There is 1 question to complete.
Previous
Next