Hospitality Industry Financial Accounting With Answer Sheet (ahlei)

Hardcover | July 8, 2015

byRaymond S. Schmidgall, James W. Damitio, American Hotel & Lodging Association

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This textbook presents basic financial accounting concepts and shows your students how they apply to the hospitality industry. Hospitality Industry Financial Accounting, Fourth Edition, was prepared in conjunction with the brand-new 11th revised edition of the USALI, to which Ray Schmidgall was a key participant. Revisions to a number of chapters have been made to reflect all of the changes made in this latest edition of the USALI.

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This textbook presents basic financial accounting concepts and shows your students how they apply to the hospitality industry. Hospitality Industry Financial Accounting, Fourth Edition, was prepared in conjunction with the brand-new 11th revised edition of the USALI, to which Ray Schmidgall was a key participant. Revisions to a numbe...

Format:HardcoverDimensions:568 pages, 8.8 × 7 × 1.2 inPublished:July 8, 2015Publisher:Pearson EducationLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0133768082

ISBN - 13:9780133768084

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Table of Contents

Table of Content

 

CHAPTER 1: INTRODUCTION TO ACCOUNTING

Accounting Defined

Bookkeeping Versus Accounting

Branches of Accounting

Organizations Influencing Accounting

Forms of Business Organization

Sole Proprietorships

Partnerships

Limited Partnerships

Limited Liability Companies

Corporations

S Corporations

The Accounting Function in the Hospitality Industry

Principles of Accounting

Cost

Business Entity

Continuity of the Business Unit (Going Concern)

Unit of Measurement

Objective Evidence

Full Disclosure

Consistency

Matching

Conservatism

Materiality

Revenue Recognition

Overview of Financial Statements

Balance Sheet

Income Statement

Statement of Cash Flows

Cash Versus Accrual Accounting

The Fundamental Accounting Equation

Effects of Transactions on the Accounting Equation

 

CHAPTER 2: ACCOUNTING FOR BUSINESS TRANSACTIONS

Accounts

Asset Accounts

Liability Accounts

Owners’ Equity Accounts

Debit and Credit

Mechanics of Double–Entry Accounting

Recording Changes in Assets, Liabilities, and Owners’ Equity

Recording Changes in Revenues and Expenses

Recording Owner’s Withdrawals

Determining Account Balances

Normal Balances

General Ledger

Journalizing

Standard Account Forms

Posting

The Trial Balance

Compound Journal Entries

Comprehensive Illustration—Journalizing, Posting, and Preparing a Trial Balance

 

CHAPTER 3: ACCOUNTING ADJUSTMENTS

The Need for Adjustments

Cash Versus Accrual Accounting

Classification of Adjusting Entries

Deferral Adjustments Illustrated

Prepaid Insurance/Insurance Expense

Depreciation Expense

Unearned Revenues

Accrual Adjustments Illustrated

Accrued Wages Payable

Accrued Utilities

Accrued Assets

Failure to Prepare Adjustments

Comprehensive Illustration—Adjustments

 

CHAPTER 4: COMPLETING THE ACCOUNTING CYCLE

The Accounting Cycle

Adjusted Trial Balance

Preparation of Financial Statements

Closing Entries

Post–Closing Trial Balance

The Worksheet

Reversing Entries

Comprehensive Illustration—Completing the Accounting Cycle

 

CHAPTER 5: INCOME STATEMENT

Major Elements of the Income Statement

Relationship with the Balance Sheet

Sales

Cost of Goods Sold

Expenses

Gains and Losses

Income Taxes

Extraordinary Items

Earnings per Share

Income Statements for Internal and
    External Users

Uniform System of Accounts

Internal Income Statements—A Contribution Approach

Contents of the Summary Operating Statement

Departmental Statements

Uniform System of Accounts for Restaurants

Statement of Retained Earnings

 

CHAPTER 6: BALANCE SHEET

Purposes of the Balance Sheet

Limitations of the Balance Sheet

Balance Sheet Formats

Content of the Balance Sheet

Current Accounts

Noncurrent Receivables

Investments

Property and Equipment

Other Assets

Long–Term Liabilities

Owners’ Equity

Footnotes

Consolidated Financial Statements

 

CHAPTER 7: SPECIALIZED JOURNALS AND SUBSIDIARY LEDGERS

Control Accounts and Subsidiary Ledgers

Specialized Journals

Sales Journal

Cash Receipts Journal

Purchases Journal

Cash Disbursements Journal

General Ledger

General Journal

Payroll Journal

Specialized Journals for Lodging
    Operations

Computerized Systems

Hardware

Software

Hotel Computer Systems

 

CHAPTER 8: CASH

Internal Control of Cash

Voucher System

Preparation of a Voucher

Petty Cash

Bank Reconciliation

Preparing a Bank Reconciliation

Illustration of a Bank Reconciliation

Gross Method of Recording Purchases

Net Method of Recording Purchases

Credit Card Sales

Integrated Cash Management for Multi–Unit Operations

 

CHAPTER 9: RECEIVABLES AND PAYABLES

Uncollectible Accounts Expense (Bad Debts)

Direct Write–Off Method

Allowance Method

Notes Receivable

Interest–Bearing Notes

Notes Payable

Non–Interest–Bearing Notes

 

CHAPTER 10: INVENTORY

Periodic Versus Perpetual Inventory Systems

Taking a Physical Inventory

Consigned Goods

Transportation Costs

Inventory Valuation Methods

Comparison and Evaluation of Inventory Valuation Methods

Estimating Ending Inventory and Cost of Goods Sold

The Retail Method

The Gross Profit Method

Lower of Cost or Market (LCM)

Perpetual Inventory System

 

CHAPTER 11: PROPERTY, EQUIPMENT, AND OTHER ASSETS

Property and Equipment

Lump Sum Purchase

Depreciation

Intangible Assets

Other Assets

 

CHAPTER 12: CURRENT LIABILITIES AND PAYROLL

Notes Payable

Accounting for Payroll–Related Liabilities

Payroll Records

Regular Pay and Overtime Pay

Payroll Journal Entries

Reporting Tips

Other Current Liabilities

Property Taxes

 

CHAPTER 13: PARTNERSHIPS

Advantages of Partnerships

Ease of Formation

No Partnership Taxes

Synergy

Disadvantages of Partnerships

Limited Life

Mutual Agency

Unlimited Liability

General Versus Limited Partnerships

Partners’ Capital and Drawing Accounts

Formation of a Partnership

Division of Income

Admission of a New Partner

Withdrawal of a Partner

Liquidation of a Partnership

 

CHAPTER 14: CORPORATE ACCOUNTING

Financial Statements

Advantages and Disadvantages of the Corporation

Taxes

Organizational Structure

Forming a Corporation

Common Stock

Dividends

Retained Earnings

Stock Subscription Plan

Preferred Stock

Cash Dividends Compared to Stock Dividends

Stock Splits

Treasury Stock

Book Value per Share of Common Stock

Book Value Versus Market Value per Share

 

CHAPTER 15: BONDS, LEASES, AND MORTGAGES PAYABLE

Disadvantages and Advantages of Bond Financing

Disadvantages of Bond Financing

Advantages of Bond Financing

Classifying Bonds

Other Features of Bonds

Journal Entries for Issuance of Bonds

Bonds Sold Between Interest Payment Dates

Market Value Versus Face Value

Bonds Issued at a Discount

Bonds Issued at a Premium

Year–End Adjusting Entries for Bonds Payable

Effective Interest Rate Method of Bond Amortization

Bond Sinking Fund

Convertible Bonds

Retirement of Bonds

Leases

Pensions

Mortgages Payable

 

CHAPTER 16: INVESTMENTS IN CORPORATE SECURITIES

Accounting for Investments

Investments in Debt Securities

Short–Term Equity Investments

Long–Term Equity Investments

Valuation of Investments

Held–to–Maturity Securities

Trading Securities

Available–for–Sale Securities

 

CHAPTER 17: STATEMENT OF CASH FLOWS

The Purpose of the Statement of Cash Flows

Classification of Cash Flows

Conversion of Accrual Income to Net Cash Flows from Operations

Direct and Indirect Methods

Preparing the SCF

Step 1: Determining Net Cash Flows from Operating Activities

Step 2: Determining Net Cash Flows from Investing Activities

Step 3: Determining Net Cash Flows from Financing Activities

Step 4: Presenting Cash Flows by Activity on the SCF

Interpreting the Results

Accounting for Other Transactions

 

CHAPTER 18: ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS

Analysis of Financial Statements

Horizontal Analysis

Vertical Analysis

Trend Analysis

Ratio Analysis

Ratio Standards

Purposes of Ratio Analysis

Average Versus Ending Value

Classes of Ratios

Liquidity Ratios

Current Ratio

Acid–Test Ratio

Operating Cash Flows to Current Liabilities Ratio

Accounts Receivable Turnover

Average Collection Period

Solvency Ratios

Debt–Equity Ratio

Long–Term Debt to Total Capitalization Ratio

Debt Service Coverage Ratio

Number of Times Interest Earned Ratio

Fixed Charge Coverage Ratio

Operating Cash Flows to Total Liabilities Ratio

Activity Ratios

Inventory Turnover

Property and Equipment Turnover

Asset Turnover

Paid Occupancy Percentage and Seat Turnover

Complimentary Occupancy

Occupancy Percentage

Average Occupancy per Room

Multiple Occupancy

Profitability Ratios

Profit Margin

Gross Operating Profit Margin Ratio

Gross Operating Profit per Available Room

EBITDA Margin Ratio

Return on Assets

Return on Owners’ Equity

Earnings per Share

Price Earnings Ratio

Viewpoints Regarding Profitability Ratios

Operating Ratios

Mix of Sales

Average Daily Rate

Revenue per Available Room

Average Food Service Check

Food Cost Percentage

Beverage Cost Percentage

Labor Cost Percentage

Limitations of Ratio Analysis