Hospitality Accounting
Solved Exam Questions
Course Introduction
Hospitality Accounting provides students with an introduction to the fundamental principles and practices of financial accounting as applied in the hospitality industry. The course covers topics such as recording financial transactions, preparing and interpreting financial statements, managing budgets, internal controls, and cost allocation specific to hotels, restaurants, and other hospitality businesses. Students learn how to analyze financial information to make informed managerial decisions and ensure regulatory compliance, gaining practical skills essential for careers in hospitality management.
Recommended Textbook
Hospitality Financial Management 1st Edition by Robert E. Chatfield
Available Study Resources on Quizplus
12 Chapters
393 Verified Questions
393 Flashcards
Source URL: https://quizplus.com/study-set/3806 Page 2
Chapter 1: Introduction
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/75991
Sample Questions
Q1) A value-creating innovation of Holiday Inns was
A)the unique green and yellow color scheme.
B)exterior corridor properties.
C)a "cash-only" payment policy.
D)a national reservation system.
Answer: D
Q2) The earnings of a firm are not equivalent to its cash flows.
A)True
B)False
Answer: True
Q3) The goal of hospitality financial management is to maximize the wealth of the owners.
A)True
B)False
Answer: True
Q4) Shirking is considered an agency problem.
A)True
B)False Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Financial Markets and Financial Instruments
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/75990
Sample Questions
Q1) Forward contracts are easier to sell than a futures contract.
A)True
B)False
Answer: False
Q2) American hospitality companies really don't have to worry about foreign currency.
A)True
B)False Answer: False
Q3) Insurance companies have decreased their loans to hospitality firms in recent years.
A)True
B)False
Answer: True
Q4) We measure the uncertainty of an investment by its mean average)return.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Review of Financial Statements and Selected Ratios
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/75989
Sample Questions
Q1) A high inventory turnover ratio
A)is always good.
B)could indicate that we are buying too much inventory.
C)could indicate a problem with "stockouts."
D)means that our inventory is too costly.
Answer: C
Q2) The balance sheet is good for a period of time.
A)True
B)False
Answer: False
Q3) Cash is found in the owner's equity account.
A)True
B)False
Answer: False
Q4) RevPar can be calculated by multiplying the occupancy percentage by the ADR.
A)True
B)False
Answer: True
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: The Relationship Between Risk and Return
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/75988
Sample Questions
Q1) The Security Market Line represents a minimum return benchmark for an asset.
A)True
B)False
Q2) The bell curve is a graphical representation of A)the normal distribution.
B)the standard deviation.
C)the variance.
D)half the outcomes of an experiment.
Q3) The beta of the market portfolio is A)+1.0.
B)0.
C)-1.0.
D)the market portfolio does not have a beta.
Q4) Beta measures the total risk of an investment.
A)True
B)False
Q5) If two assets are perfectly positively correlated, we can put them together into a portfolio and completely eliminate risk.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Time Value of Money
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75987
Sample Questions
Q1) Everything else being the same, the more frequent the compounding, the higher the future value.
A)True
B)False
Q2) Which of the following properly describes the future value of an ordinary annuity?
A)The first payment is one period after the present value.
B)The last payment is one period after the future value.
C)The first payment is on the same date as the present value.
D)The last payment is on the same date as the future value.
Q3) An infinite annuity is called a perpetuity.
A)True
B)False
Q4) The process of computing the present value of a future value is called discounting.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Fixed Income Securities: Bonds and Preferred Stock
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75986
Sample Questions
Q1) What is the yield to maturity on a $1,000 par value 81/4% bond purchased for $850? Assume the coupon is paid annually and the maturity is 13 years.
A)10.41%
B)10.51%
C)10.32%
D)10.63%
Q2) Which of the following has the highest seniority ranking?
A)junior, subordinated debenture
B)junior, unsubordinated debenture
C)senior subordinated debenture
D)senior, unsubordinated debenture
Q3) A 12% bond matures in 14 years. Assuming the coupon is paid semiannually and the par value is $1,000, what is the value of this bond to an investor requiring a 15% rate of return?
A)$828.27
B)$872.66
C)$411.98
D)$826.40
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Common Stock
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75985
Sample Questions
Q1) Gourrier Sleepy Motels currently pays a $2.00 common stock dividend. Dividends have been growing at a 3% annual rate and are expected to continue growing at this rate for the next 4 years. Thereafter the growth rate is expected to be 0% for the foreseeable future. What is the current value of Gourrier common stock to an investor requiring a 12% rate of return?
A)$18.44
B)$17.17
C)$22.89
D)$17.01
Q2) Keong is considering an investment in Leong's Bar & Grille Corporation. Keong is planning to buy the stock today, hold it for 2 years, and then expects to sell the stock for $30 at the end of 2 years. Keong expects the first dividend to be $1.00 and the second dividend to be $1.30. If Keong requires a 15% rate of return, what is the value of Leong's Bar & Grille common stock to Keong today?
A)$21.58
B)$23.55
C)$24.54
D)$23.67
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Cost of Capital
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75984
Sample Questions
Q1) A firm's weighted average cost of capital is the average cost of the various short-term sources of financing employed by the firm.
A)True
B)False
Q2) Issuance or flotation costs are the costs investors pay to brokers when they purchase common stock.
A)True
B)False
Q3) Funds raised by the issuance of preferred stock are not considered part of a firm's capital.
A)True
B)False
Q4) Which of the following is typically not treated as one of the components of capital in cost of capital schedule calculations?
A)long-term debt
B)short-term debt
C)common equity
D)preferred stock
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Introduction to Capital Budgeting and Cash
Flow Estimation
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75983
Sample Questions
Q1) Capital budgeting decisions are based upon cost-benefit analysis. A project's net investment is compared to the project's net cash flows in order to make a decision.
A)True
B)False
Q2) Tokyo Food Supplies Corporation is considering an expansion to a new market. Tokyo Food Supplies has already conducted and paid $35,000 for a marketing survey. The expansion will cost $400,000 for new assets, another $25,000 for shipping and delivery costs, and another $70,000 for installation costs. In addition, $150,000 in net working capital will be needed immediately. Compute the net investment.
A)$495,000
B)$680,000
C)$645,000
D)$550,000
Q3) If a depreciable asset is sold for less than its book value, then taxes must be paid on the difference.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Capital Budgeting Decision Methods
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75982
Sample Questions
Q1) A capital budgeting project has a net investment of $550,000 and is expected to generate net cash flows of $200,000 annually for 7 years. What is the payback period?
A)5.5 years
B)2.25 years
C)2.55 years
D)2.75 years
Q2) A capital budgeting project has a net investment of $250,000 and is expected to generate net cash flows of $90,000 annually for 5 years. What is the profitability index at a 13% required rate of return?
A)1.27
B)1.80
C)1.24
D)1.30
Q3) A project's net present value is the sum of the future values of the net cash flows compounded at the required rate of return minus the net investment.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: An Introduction to Hotel Valuation
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/75981
Sample Questions
Q1) If the appraiser finds deferred maintenance at the property, she should
A)add it to the value of the property.
B)subtract it from the value conclusion.
C)increase maintenance expense in the income statement.
D)use a higher discount rate.
Q2) Which of the following is NOT one of the stages in the neighborhood life cycle?
A)growth
B)re-birth
C)stability
D)decline
Q3) The best source for projecting operating expenses for a hotel is the financial statements of comparable hotels.
A)True
B)False
Q4) The final reconciliation of value should
A)be an average of all the approaches used.
B)ignore the approaches not used.
C)be based on the approach that is considered the most reliable.
D)none of the above.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Capital Structure
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/75980
Sample Questions
Q1) As a firm increases its use of debt financing, what is the impact upon the cost of equity?
A)The cost of equity decreases.
B)The cost of equity remains the same.
C)The cost of equity increases.
D)None of the above.
Q2) How does financial leverage affect firm risk?
A)Financial leverage increases the volatility of a firm's sales revenue.
B)Financial leverage increases the volatility of a firm's return on equity.
C)Financial leverage increases the volatility of a firm's EBIT.
D)Financial leverage increases the volatility of a firm's operating costs.
Q3) Which of the following is most likely to cause a firm to use more financial leverage?
A)the current owners concern for maintaining control of a healthy firm
B)concern for the firm's Moodys and S & P bond ratings
C)concern for maintaining excess borrowing capacity
D)management's concern for their own risk
Q4) Fixed cost sources of financing include both debt and common stock.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14