The amount that results from deducting cash sales from total sales. In other words, it is equal to the net amount of gross sales minus sales returns, sales allowances, and sales discounts. Net credit sales are revenues generated by an entity over a given period from credit sales only, after adjusting for all transactions with a reversal effect. To that end, net credit sales do not include sales for which payment is immediately received (in cash).

Credit sales arise from selling goods or services to an entity’s customers on credit (and hence appear on the statement of financial position as receivables).