Hospitality Management Accounting 9th Edition

1 CHAPTER 1 BASIC FINANCIAL ACCOUNTING REVIEW INTRODUCTION This chapter reviews basic accounting principles and procedures. It is a necessary chapter for those whose accounting background is poor. If students have recently completed an introductory accounting course, this chapter could be omitted, or assigned for self review. Chapters 1

161 CHAPTER 10 STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS INTRODUCTION The statement of cash flows and working capital analysis are discussed in this chapter. As you will see, both statements have in common the analysis and evaluation of current assets and current liabilities. The statement

175 CHAPTER 11 CASH MANAGEMENT INTRODUCTION An understanding of the accrual concept of accounting makes one realize that the net income figure on the income statement is not necessarily the equivalent of cash. For this reason, it is important for a business to develop cash budgets from

193 CHAPTER 12 CAPITAL BUDGETING AND THE INVESTMENT DECISION INTRODUCTION Most of the matters discussed in the preceding eleven chapters concerned techniques, tools, and methods available to management for short-run (generally defined as less than one year) decision making. This chapter is concerned with long-run decision making for

205 CHAPTER 13 FEASIBILITY STUDIES AN INTRODUCTION INTRODUCTION In many ways, this chapter can be considered a continuation of Chapter 12. While Chapter 12 covered various methods for evaluating investments in long-term assets for periods up to five or so years, this chapter takes a look at what

214 CHAPTER 14 FINANCIAL GOALS AND INFORMATION SYSTEMS INTRODUCTION This final chapter has two major sections. The first covers financial goals and the various types of financial goals that a firm may select from as well as other goals. The second part of the chapter covers information systems

19 CHAPTER 2 UNDERSTANDING FINANCIAL STATEMENTS INTRODUCTION For students who have recently completed an introductory accounting course most of this chapter will be review material. However, the chapter explains financial statements in the specific terms used by hospitality industry enterprises; terms that may not be learned in

37 37 37 CHAPTER 3 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS INTRODUCTION Before financial statements can be analyzed, the reader must have a good grasp of the way different statements are prepared. It is extremely beneficial to have a firm conceptual under- standing of basic accounting and

57 CHAPTER 4 RATIO ANALYSIS INTRODUCTION This chapter could be considered a continuation of Chapter 3, although Chapter 3 is not necessarily a prerequisite for ratio analysis. However, to have a good comprehension of the information provided by ratio analysis, the student should have a good understanding

69 P4.6 Use the information provided from P4.5 and the income statement for year 0007, calculate the following ratios. a. Return on Assets: [Income before interest and income tax / Total average assets] Average assets: ($422,200 + $406,700) / 2 = $828,900 / 2 =

79 CHAPTER 5 INTERNAL CONTROL INTRODUCTION This chapter can be studied relatively independently of other chapters in the textbook. However, the meaningful use of most of the tools, techniques, and methods explained and illustrated in other chapters in the text depends on the accuracy of the information

91 CHAPTER 6 THE BOTTOM-UP APPROACH TO PRICING INTRODUCTION The prime purpose of this chapter is to encourage the students to think about net income as a cost to be considered in setting selling prices, rather than being merely what is left for the owners after all

107 CHAPTER 7 COST MANAGEMENT INTRODUCTION Chapter 6 discussed the concept of establishing prices to help achieve a particular desired return on investment. However, there is often a limit to how high prices can be pushed before customer resistance occurs and reduced demand for the product or

123 CHAPTER 8 THE CVP APPROACH TO DECISIONS INTRODUCTION In Chapter 5, we briefly discussed the use of a standard cost to compare to actual costs to control food and beverage costs. Chapter 7 identified various costs by type, knowledge of which is necessary to facilitate understanding

140 CHAPTER 9 OPERATIONS BUDGETING INTRODUCTION This chapter, although it covers most of the relevant theory of budgeting, concentrates on budgeted income statements. For this reason, the student should be very familiar with the content of Chapter 2 concerning income statements and their typical content and format.

151 P9.9 Complete an analysis for budget, price and volume variances. a. Sales revenue volume and price variances: Budget [1,500 $5.00] $7,500.00 Actual [1,550 $4.80] 7,440.00 Budget sales volume variance $ 60.00 Unfavorable Price variance [1,550 $0.20] $ 310.00 Unfavorable Sales

CHAPTER 1 BASIC FINANCIAL ACCOUNTING REVIEW TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True answers and F for False answers) 1. Accounting principles and concepts are broad rules developed to create a common T 1. Accounting principles and concepts are broad rules developed to create a common

CHAPTER 10 STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS TRUE or FALSE QUESTIONS (Correct answer indicated by T for True answers and F for False answers) 1. Total current assets total current liabilities = working capital. T 1. Total current assets total current liabilities = working capital. T

CHAPTER 11 CASH MANAGEMENT TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True and F for False answers) 1. The amount of cash that a company has on hand at any time is constantly fluctuating. T 1. The amount of cash that a company has on hand

CHAPTER 12 CAPITAL BUDGETING AND THE INVESTMENT DECISION TRUE OR FALSE QUESTIONS (Correct answers indicated by T for True and F for False answers) 1. Decisions concerning investment in long-life assets are no more complex than F 1. Decisions concerning investment in long-life assets are no more complex

CHAPTER 13 FEASIBILITY STUDIES AN INTRODUCTION TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True and F for False answers) 1. A feasibility study is designed to guarantee to a lender that a new hotel project will be F 1. A feasibility study is designed to guarantee

CHAPTER 14 FINANCIAL GOALS AND INFORMATION SYSTEMS TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True and F for False answers) 1. Regardless of the type and size of a hospitality enterprise, financial management will T 1. Regardless of the type and size of a hospitality enterprise, financial

CHAPTER 2 UNDERSTANDING FINANCIAL STATEMENTS TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True answers and F for False answers) 1. Financial statements provide information useful to management for decision-making. T 1. Financial statements provide information useful to management for decision-making. T 1. Financial statements provide information

CHAPTER 3 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True answers and F for False answers) 1. Various readers of financial statements will generally analyze them in different ways. T 1. Various readers of financial statements will generally analyze them

CHAPTER 4 RATIO ANALYSIS TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True answers and F for False answers) 1. A percentage is a type of ratio. T 1. A percentage is a type of ratio. T 1. A percentage is a type of ratio. T

CHAPTER 5 INTERNAL CONTROL TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True and F for False answers) 1. Accurate accounting information is aided by a good internal control system. T 1. Accurate accounting information is aided by a good internal control system. T 1. Accurate accounting

CHAPTER 6 THE BOTTOM-UP APPROACH TO PRICING TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True and F for False) 1. Trial-and-error pricing is also known as intuitive pricing. F 1. Trial-and-error pricing is also known as intuitive pricing. F 1. Trial-and-error pricing is also known as

CHAPTER 7 COST MANAGEMENT TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True and F for False) 1. Knowledge of the identity and classification of a specific cost is essential when T 1. Knowledge of the identity and classification of a specific cost is essential when T

CHAPTER 8 THE CVP APPROACH TO DECISIONS TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True and F for False answers) 1. CVP analysis assumes that costs have been fairly accurately broken down into their T 1. CVP analysis assumes that costs have been fairly accurately broken

CHAPTER 9 OPERATIONS BUDGETING TRUE OR FALSE QUESTIONS (Correct answer indicated by T for True and F for False answers) 1. Budgets are always expressed in monetary terms. F 1. Budgets are always expressed in monetary terms. F 1. Budgets are always expressed in monetary terms. F 2.