How do you find the net sales when you have bad debts accounts?
submitted by Jasmin Tia

consumer_of_chili

Start with your gross sales revenue. Deduct the estimated or actual bad debts expense (bad debts written off or provision for doubtful accounts) from gross sales.

The formula is: Net Sales = Gross Sales - Bad Debts Expense

Making this adjustment will show the sales revenue that the company realistically expects to collect.

Jenny-O

Net sales are what the company actually earns from sales after taking out any bad debts. So, if you know the total sales and how much of those sales you couldn't collect (bad debts), just subtract that amount from the total sales. That gives you the net sales.

John Jenkins

Just subtract the bad debts from your total sales. That gives you the net sales amount because you're removing the money you don't expect to get paid.