A sole trader's sales are Rs. 180,000 and sales returns are Rs. 12,000. What amount is reported as net sales?
Correct answer: A. Rs. 168,000
- A. Rs. 168,000
- B. Rs. 180,000
- C. Rs. 192,000
- D. Rs. 12,000
Explanation
Net sales equal gross sales less sales returns, so Rs. 180,000 minus Rs. 12,000 gives Rs. 168,000. Sales returns are deducted because they reduce the amount earned from customers.
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About Financial Statements of Sole Traders
Sole trader statements calculate revenue, cost of sales, gross profit, operating expenses and net profit, then present assets, liabilities and owner’s capital in the statement of financial position. Adjustments for closing inventory, accruals, prepayments, depreciation, bad debts, drawings and additional capital connect the two statements.
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