When estimating bad debt expense, what exactly is net sales?

Question by James: When estimating bad debt expense, what exactly is net sales?
I have reviewed both my introductory and intermediate accounting books, and they don't show what exactly net sales are when estimating bad debts. They give you a number called net sales, but don't tell you how that is actually pulled from the general ledger accounts.

For example, net sales of $ 200,000 with bad debt expense estimated at 3% of net sales is $ 6,000. Easy enough. Is "net sales" gross sales, or is it sales minus sales returns and allowances and sales discounts?


Best answer:
Answer by MarcYou nailed it.

Net sales equal Gross Sales, less sales returns and less sales discounts

Know

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