Managerial Accounting For The Hospitality Industry, 2nd Edition

Cover
Title Page
Copyright
About the Authors
Contents
Preface
1 Hospitality Industry Accounting
	Unique Aspects of the Hospitality Industry
	The Purpose of Accounting in the Hospitality Industry
	Branches of Accounting
		Financial Accounting
		Cost Accounting
		Tax Accounting
		Auditing
		Managerial Accounting
	Why Hospitality Managers Use Managerial Accounting
	The Uniform System of Accounts
		Uniform System of Accounts for the Lodging Industry (USALI)
		Uniform System of Accounts for Restaurants (USAR)
		Uniform System of Financial Reporting for Clubs (USFRC)
	Ethics and Hospitality Accounting
		Ethical Analysis
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
2 Accounting Fundamentals Review
	Bookkeeping and Accounting
	The Accounting Equation
	Recording Changes to the Accounting Equation
		Double‐Entry Accounting
		The Journal and General Ledger
		Credits and Debits
	Generally Accepted Accounting Principles
		The Distinct Business Entity Principle
		The Going Concern Principle
		The Monetary Unit Principle
		The Time Period Principle
		The Cost Principle
		The Consistency Principle
		The Matching Principle
		The Materiality Principle
		The Objectivity Principle
		The Conservatism Principle
		The Full Disclosure Principle
	The Hospitality Business Cycle
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
3 The Income Statement
	The Purpose of the Income Statement
		Owners
		Investors
		Lenders
		Creditors
		Managers
	Income Statement Preparation
		Format
		Accounting Period
		Revenue Data
		Expense Data
		Schedules
	Income Statement Analysis
		Revenue Analysis
		Expense Analysis
		Profit (Loss) Analysis
		Vertical Analysis
		Horizontal Analysis
		Assessing Revenue Variance
		Assessing Expense Variance
		Assessing Profit Variance
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
4 The Balance Sheet
	The Purpose of a Balance Sheet
		Owners
		Investors
		Lenders
		Creditors
		Managers
		Limitations of the Balance Sheet
	Balance Sheet Formats
		Balance Sheet Contents
	Components of the Balance Sheet
		Assets
		Liabilities
		Owners’ Equity
	Balance Sheet Analysis
		Vertical Analysis of Balance Sheets
		Horizontal Analysis of Balance Sheets
		Determining Variance
		Inflation Accounting
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
5 The Statement of Cash Flows
	Understanding Cash Flows
	The Purpose of the Statement of Cash Flows (SCF)
	Sources and Uses of Funds
	Creating the Statement of Cash Flows
		Cash Flow from Operating Activities
		Cash Flow from Investing Activities
		Cash Flow from Financing Activities
		Net Changes in Cash
		Supplementary Schedules
	Statement of Cash Flows Analysis
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
6 Ratio Analysis
	Purpose and Value of Ratios
		Value of Ratios to Stakeholders
	Types of Ratios
		Liquidity Ratios
		Solvency Ratios
		Activity Ratios
		Profitability Ratios
		Investor Ratios
		Hospitality‐Specific Ratios
	Comparative Analysis of Ratios
	Ratio Analysis Limitations
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
7 Food and Beverage Pricing
	Factors Affecting Menu Pricing
		Factors Influencing Menu Price
	Assigning Menu Prices
		Marketing Approaches to Pricing
		Cost Approaches to Pricing
	Menu Price Analysis
		Matrix Analysis
		Goal Value Analysis
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
8 Revenue Management for Hotels
	Establishing Room Rates
		The Hubbart Room Rate Formula
		The $1.00 per $1,000 Rule
		Alternative Room Rate Methodologies
		Web‐Influenced Room Rate Methodologies
	Revenue Management
		Occupancy Percentage
		Average Daily Rate (ADR)
		Net ADR Yield
		Flow‐Through
		Gross Operating Profit per Available Room (GOPPAR)
	Non‐Room Revenue
		Food and Beverage Revenue
		Telecommunications Revenue and Expense
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
9 Managerial Accounting for Costs
	The Concept of Cost
	Types of Costs
		Fixed and Variable Costs
		Mixed Costs
		Step Costs
		Direct and Indirect (Overhead) Costs
		Controllable and Non‐Controllable Costs
		Other Cost Types
	Cost/Volume/Profit Analysis
		Computation of Cost/Volume/Profit Analysis
		Margin of Safety
		Minimum Sales Point
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
10 Forecasting in the Hospitality Industry
	The Importance of Accurate Forecasts
	Forecast Methodology
		Forecasting Restaurant Revenues
		Forecasting Future Revenues
		Forecasting Future Guest Counts
		Forecasting Future Average Sales per Guest
		Forecasting Hotel Revenues
	Utilizing Trend Lines in Forecasting
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
11 Budgeting and Internal Controls
	Importance of Budgets
	Types of Budgets
		Length
		Purpose
	Operations Budget Essentials
		Prior‐Period Operating Results
		Assumptions about the Next Period’s Operations
		Knowledge of the Organization’s Financial Objectives
	Developing an Operations Budget
		Budgeting Revenues
		Budgeting Expenses
	Monitoring an Operations Budget
		Revenues
		Expenses
		Profit
		Variances
		Budget Modifications
	Cash Budgeting
		Cash and Accounts Receivable Activities
		Cash and Accounts Payable (AP) Activities
		Cash Receipts/Disbursements Approach to Cash Budgeting
	Managing Budgets through Internal Control
		Management’s Concern for Assets
		Accurate Data Collection and Comparison to Written Standards
		Separation of Responsibilities
		Cost Effectiveness
		Regular External Review
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
12 Capital Investment, Leasing, and Taxation
	Capital Budgeting
		Establish a Business
		Expand a Business (Increase Revenues)
		Increase Efficiency (Reduce Expenses)
		Comply with the Law
	Capital Investment
		Time Value of Money
		Rates of Return
		Capitalization Rates
	Financing Alternatives
		Debt Versus Equity Financing
		Lease Versus Buy Decisions
		Capital Versus Operating Leases
	Taxation
		Income Taxes
		Capital Gains Taxes
		Property Taxes
		Other Hospitality Industry Taxes
		Modified Accelerated Cost Recovery System (MACRS)
		The Internal Revenue Service (IRS)
	Apply What You Have Learned
	Key Terms and Concepts
	Test Your Skills
Index
EULA