How To Calculate Net Sales
Here we are concerned with Net Sales Calculation. You may also be interested in, “ Credit Sales Journal Entry With Example ” In order to arrive Net Sales, Sales Returns & Allowances and Sales Discounts are deducted from Total Sales or Gross Sales. Mathematically, we can write / type as shown below: Net Sales = Gross Sales - Sales Returns - Sales Allowances - Sales Discounts For Example, if the Gross Sales is Rs. 1000000, Sales Returns is Rs. 100000, Allowances is Rs. 50000, Discounts is Rs. 100000, then Net Sales is Calculated as follows: Net Sales = 1000000 - 100000 - 50000 - 100000 = 750000 Net Sales is Reported On Trading & Profit And Loss Account or Income Statement to calculate Gross Profit for the business in the Current Accounting Period. In case of Services Company, Net Sales is reported on Income Statement or Profit And Loss Account in order to give true and fair view of Financial Statements th...