If Sales are 700,000 and Sales Returns and Allowances are 40,000, Net Sales are:

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Multiple Choice

If Sales are 700,000 and Sales Returns and Allowances are 40,000, Net Sales are:

Explanation:
Net sales represent the actual revenue the company keeps after customers return goods or receive allowances. It’s found by subtracting Sales Returns and Allowances from Gross Sales. Here, gross sales are 700,000 and returns/allowances are 40,000, so net sales = 700,000 − 40,000 = 660,000. This matches the given answer. The other numbers would result from incorrect handling—adding the returns back or ignoring them or subtracting a different amount.

Net sales represent the actual revenue the company keeps after customers return goods or receive allowances. It’s found by subtracting Sales Returns and Allowances from Gross Sales. Here, gross sales are 700,000 and returns/allowances are 40,000, so net sales = 700,000 − 40,000 = 660,000. This matches the given answer. The other numbers would result from incorrect handling—adding the returns back or ignoring them or subtracting a different amount.

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