What are Sales?

Sales refers to the volume of goods and services sold by a business during a reporting period.

The term can also refer to the selling organization of a business, and the activities this group engages in to secure orders from customers. In this context, sales includes lead generation, sales presentations, cold calling, contract negotiations, and post-call account servicing.

Presentation of Sales

When quantified into a monetary amount, an organization’s total sales figure is positioned at the top of the income statement, after which operating and other expenses are subtracted to arrive at a profit or loss figure. Sales may also appear in the income statement as gross sales, after which sales returns and allowances are deducted from it to show a net sales figure. The gross and net presentation is preferred, since it gives users more information about the volume of sales returns and allowances that the entity is experiencing.