Redwing Company sold inventory costing $500 to a customer on account for $700.Which of the following does not correctly describe the collection of $686 cash when the customer takes advantage of a sales discount?

A) Gross profit decreases $14.
B) Accounts receivable decrease $700.
C) Net sales decrease $14.
D) Net income is not affected.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, indicating the company's overall profitability during a specific period.

Net Sales

Net sales are the total revenue from goods and services sold by a company, after deducting returns, allowances for damaged or missing goods, and discounts.