In performing a vertical analysis for a merchandising company, the base for sales returns and allowances is
A) sales.
B) cost of goods sold.
C) net sales.
D) total revenues.

Question

Quizplus · Accepted Answer

In a vertical analysis for a merchandising company, the base for sales returns and allowances is net sales. This is because sales returns and allowances are directly deducted from gross sales to arrive at net sales, making it the most relevant base for comparison.

In Performing a Vertical Analysis for a Merchandising Company, the Base