Business Accounting and Bookkeeping
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What is the difference between gross sales and net sales when reporting taxes?

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2007-06-20 22:24:10

Gross sales is how much money came in. (Let's say I sold 100

widgets at $10 each, my gross sales would be $1,000) Net sales is

the profit after expenses (let's say I bought those 100 widgets

from a manufacturer at $ 8 each. My profit per widget was only $2,

so my net sales would be $200) In most areas, taxes are based on

net sales, rather than gross sales.

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