Net sales equals, sales minus:
Correct answer: B. Return inwards
- A. Return outwords
- B. Return inwards
- C. cost of goods sold
- D. carriage on sales
Explanation
Net sales are calculated after deducting sales returns, also called returns inward, from gross sales. Returns outward relate to purchases and therefore do not reduce sales.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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