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In
bookkeeping Bookkeeping is the recording of financial transactions, and is part of the process of accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variab ...
,
accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to compare with other ob ...
, and
financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as businesses and corporat ...
, net sales are operating
revenue In accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to comp ...
s earned by a company for selling its products or rendering its services. Also referred to as revenue, they are reported directly on the
income statement An income statement or profit and loss accountProfessional English in Use - Finance, Cambridge University Press, p. 10 (also referred to as a ''profit and loss statement'' (P&L), ''statement of profit or loss'', ''revenue statement'', ''statemen ...
as ''Sales'' or ''Net sales''. In financial ratios that use income statement sales values, "sales" refers to net sales, not
gross sales In bookkeeping, accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as businesses and corporations. Accounting, which h ...
.
Sales Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. The seller, or the provider of the goods or services, completes a sale in ...

Sales
are the unique transactions that occur in professional
selling Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. The seller, or the provider of the Goods and services, goods or services, co ...

selling
or during
marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of adv ...

marketing
initiatives. Revenue is earned when goods are delivered or services are rendered. The term sales in a
marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of adv ...

marketing
,
advertising Advertising is a marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emphasi ...

advertising
or a general business context often refers to a free in which a buyer has agreed to purchase some products at a set time in the future. From an accounting standpoint, sales do not occur until the product is delivered. "Outstanding orders" refers to sales orders that have not been filled. A sale is a transfer of property for money or credit. In
double-entry bookkeeping Double-entry bookkeeping, also known as, double-entry accounting, is a method of bookkeeping Bookkeeping is the recording of financial transactions, and is part of the process of accounting Accounting or Accountancy is the measureme ...
, a sale of
merchandise Merchandising is any practice which contributes to the sale of products Product may refer to: Business * Product (business), an item that serves as a solution to a specific consumer problem. * Product (project management), a deliverable or set ...
is recorded in the
general journal A general journal is a daybook or subsidiary journal in which transactions relating to adjustment entries, opening stock, depreciation, accounting errors etc. are recorded. The source documents for general journal entries may be journal vouchers ...
as a
debit Debits and credits in double entry bookkeeping are entries made in account ledger A ledger is a book or collection of accounts in which account transactions are recorded. Each account has an opening or carry-forward balance Balance may refe ...
to cash or
accounts receivable Accounts receivable, abbreviated as AR or A/R, are legally enforceable claims for payment held by a business for goods supplied or services rendered that customers have ordered but not paid for. These are generally in the form of invoices An in ...
and a
credit px, Domestic credit to private sector in 2005 Credit (from Latin Latin (, or , ) is a classical language belonging to the Italic languages, Italic branch of the Indo-European languages. Latin was originally spoken in the area around Rome, k ...
to the sales account. The amount recorded is the actual monetary value of the transaction, not the
list price The list price, also known as the manufacturer's suggested retail price (MSRP), or the recommended retail price (RRP), or the suggested retail price (SRP) of a product (business), product is the price at which its manufacturer nominally recommend ...
of the merchandise. A discount from list price might be noted if it applies to the sale. Fees for services are recorded separately from sales of merchandise, but the bookkeeping transactions for recording "sales" of services are similar to those for recording sales of tangible goods.


Gross sales and net sales

\text=\text - \text Gross sales are the sum of all sales during a time period. Net sales are gross sales minus sales returns, sales allowances, and sales discounts. Gross sales do not normally appear on an
income statement An income statement or profit and loss accountProfessional English in Use - Finance, Cambridge University Press, p. 10 (also referred to as a ''profit and loss statement'' (P&L), ''statement of profit or loss'', ''revenue statement'', ''statemen ...
. The sales figures reported on an income statement are net sales. * sales returns are refunds to customers for returned merchandise / credit notes * debit notes * sales journal entries non-current, current batch processed transactions
predictive analytics Predictive analytics encompasses a variety of statistics, statistical techniques from data mining, predictive modelling, and machine learning that analyze current and historical facts to make predictions about future or otherwise unknown events. ...
in strategic management/administration/governance research metaframeworks * sales allowances are reductions in sales price for merchandise with minor defects, the allowance agreed upon ''after'' the customer has purchased the merchandise (see also
credit note Image:2005private sector credit.PNG, px, Domestic credit to private sector in 2005 Credit (from Latin ''credit'', "''(he/she/it)'' believes") is the Trust (social sciences), trust which allows one party to provide money or resources to another pa ...
) * sales discounts allowed are reduced payments from the customer based on invoice payment terms such as 2/10, n/30 (2% discount if paid within 10 days, net invoice total due in 30 days) * interest received for amounts in arrears * inc/exc amounts capital goods&services, non-capital goods&services input valued added tax, with cost of non-capital goods sold input vat - output vat sales of portfolio items and capital gains taxes Sales Returns and Allowances and Sales Discounts are contra-revenue accounts. In a survey of nearly 200 senior marketing managers, 70 percent responded that they found the "sales total" metric very useful.Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeiffer; David J. Reibstein (2010). ''Marketing Metrics: The Definitive Guide to Measuring Marketing Performance.'' Upper Saddle River, New Jersey: Pearson Education, Inc. . The
Marketing Accountability Standards Board (MASB) The Marketing Accountability Standards Board (MASB), authorized by the Marketing Accountability Foundation Marketing refers to activities a company undertakes to promote the buying or selling of a product, service, or good. It is one of the ...
endorses the definitions, purposes, and constructs of classes of measures that appear in ''Marketing Metrics'' as part of its ongoin
Common Language: Marketing Activities and Metrics Project
.
Revenue or Sales reported on the income statement are net sales after deducting Sales Returns and Allowances and Sales Discounts.


Unique definitions

When the US government reports
wholesale Wholesaling or distributing is the sale of goods or merchandise Merchandising is any practice which contributes to the sale of products to a retail consumer A consumer is a person or a group who intends to order, orders, or uses purch ...
sales, this includes excise taxes on certain products.Monthly Wholesale Trade Survey Definitions Statement
/ref>


Other terms


References

{{Reflist Financial accounting Accounts receivable Sales