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The financial accounting statement that contains information on a company’s net sales is the income statement. The income statement provides information on the financial performance of the business. It is, along with the balance sheet and the cash flow statement, one of the three financial statements analysts use to determine whether or not a company is a good investment.

The income statement provides data that shows whether the company has made a profit or a loss from its operations. It is sometimes referred to as a profit and loss (P&L) statement or a P&L account. In addition to net sales, which is the income generated from operations, the income statement provides information on other revenues, returns inward, returns outward, purchases and expenses incurred in the process of generating income.

The net sales refer to the amount of goods or services actually sold and for which receipts are received or expected. In certain instances, some of the goods sold are returned by customers. This is defined as returns inwards, and the value of these is subtracted from the gross sales revenue to arrive at the net sales figure. Customers may request refunds for various reasons, so all of them are simply deducted from the gross sales.

The income statement complements the balance sheet and the cash flow statement. The balance sheet, or statement of financial position, provides information on the fiscal status of a business while the cash flow statement, or statement of cash flows, provides information on the financial adaptability of the business.

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