Component |
Description |
Gross Sales |
The total revenue generated from sales before any deductions. |
Sales Returns |
The value of goods returned by customers. |
Sales Discounts |
Discounts offered to customers on sales transactions. |
Sales Allowances |
Reductions in the selling price due to defects or other issues with the goods sold. |
Net Sales Revenue |
The total revenue generated from sales after accounting for returns, discounts, and allowances. |
Formula |
Net Sales Revenue = Gross Sales – Sales Returns – Sales Discounts – Sales Allowances |
Purpose |
Used to measure the actual revenue earned from sales, providing a more accurate representation of a company’s revenue performance. |