Explain the difference between sales revenue and net sales.
Explanation of Solution
Sales revenue is an activity of selling the merchandise inventory of a business.
Sales discount is the amount given as concession to the buyer by the seller for prompt payments. In the case of sales discount, the goods are in the possession of the seller. It is the amount allowed as concession by the seller to the buyer for accepting the defective or damaged goods is known as sales allowance. In the case of sales allowance, the goods are in the possession of the buyer.
Thus, net sales are determined as reduction of sales discount or sales allowance from sales revenue of the company.
Thus, differences between sales revenue and net sales have been explained.
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