BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Explain the calculation of net sales and net purchases.

To determine

Describe the computation of net sales and net purchases.

Explanation

Net sales: The amount of price of merchandise sold during a certain period is referred to as sales revenue. Net sales is the gross sales, minus sales returns and allowances, and sales discounts.

Determination of net sales:

Net Sales = {Gross Sales–Sales Returns and Sales Allowances–Sales Discount}

Description:

  • Sales returns and allowances: Sometimes, customers either return goods due to manufacturing defects, or accept to keep the defective goods for a reduction in sale price. That amount of goods returned, or reduced amount in sale price, is referred to as sales returns and allowances. These are recorded as contra-revenue accounts.
  • Sales discounts: The merchandisers offer a reduction in sales price on initial sales, to accelerate the sale on account payments, by their customers within the sale terms promptly. Such a reduction in sales price is referred to as sales discount

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Explain vendor exploitation.

Accounting Information Systems

Use a production possibilities frontier to describe the idea of efficiency.

Principles of Microeconomics (MindTap Course List)

Financial statements are based on generally accepted accounting principles (GAAP) and are audited by CPA firms....

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)