Net Credit Sales Formula

The Net Credit Sales Formula is used to calculate Credits Sales or Sales On Credit / Account. The formula is shown below:

Net Credit Sales = Credit Sales - (Sales Returns & Allowances + Sales Discounts)

Here sales returns and sales allowances are Contra Revenue Accounts.

You Can Also Study, “How To Calculate Credit Sales”

Example, if Total Sales = Rs. 500000, Cash Sales = Rs. 400000, Sales Returns = Rs. 3000 and Sales Allowances = Rs. 1000, then what is Net Credit Sales?

We know Credit Sales = Total Sales - Cash Sales = 500000 - 400000 = Rs. 100000

And

Net Credit Sales = Credit Sales - Sales Returns - Sales Allowances

                           =   100000       -     3000           -       1000

                           = Rs. 97000