Type:
Solution Manual
Resource:
Accounting for Hospitality Managers with Answer Sheet (AHLEI)
Edition:
5th Edition
Author(s):
Raymond Cote
Accounting for Hospitality Managers Fifth Edition Instructor’s Guide Raymond Cote
Final Exam Review Instructor’s Notes
Session Outline NOTE: This final exam review session is designed for instructors who are teaching this book as part of a credited course from the Educational Institute. If your students are not enrolled in this course with the Institute, much of what follows will not apply to your situation. However, you may still find sections I. C, D, and E useful. I.
Review for the Final Exam Inform the class that this review session will attempt to anticipate Final Exam questions. A. Sources for exam questions The exam questions will be taken only from the textbook. The exam will not include: 1.
Any separate but related information you may have introduced
2.
Any separate but related discussions
3.
Additional material introduced by guest speakers, videotapes, field trips, etc.
B. Exam format and policies The Final Exam will contain multiple-choice questions. Each question is worth one point. There is only one correct answer for each question. The correct answer is the single best answer. Generally, if students have studied their assignments carefully, they need not worry about successfully completing this exam. A score of 90 or higher will entitle the student to receive on his or her certificate the designation “With Honors.” To achieve a score of 90 or higher, the student must possess more than casual knowledge of the material. If a student fails this exam, he or she will be allowed to sit for a “retake” exam at no extra charge. (A third exam is possible, though at additional expense to the student.) The retake is similar in format to the original exam, though the questions are substantially different. C. Tips on course review Inform the students that it is not a good idea for them to go back and reread the whole book, since this will result in just as much time being spent on familiar material as on unfamiliar material. The students should be encouraged to spend more time on those topics that present some difficulty and to minimize their study of topics that they already understand. D. Useful information for exam review By now, you probably know many of the areas in which discussion and review are important. Again, do not attempt to cover everything in this course. To make it easier for students to ask questions, this session need not be conducted as formally as the previous sessions. You may wish to review any topics that were troublesome when initially presented. E. Anticipating Final Exam questions 1.
Divide the class into four groups as follows: Group one: Group two:
Text chapters 1–5 Text chapters 6–10
2
Review Session
Session Outline Group three: Text chapters 11–15 Group four: Text chapters 16–20 2.
Have each student create 10 questions that cover the chapters assigned to the group. All 10 questions should be multiple-choice. They should also be based on the competencies found at the beginning of each chapter. They should write an answer key on a separate sheet of paper.
3.
Once the students have created their questions, take two students out of each group to form new groups. All four of the original groups should be represented in each new group. For example, take two students from each of the old groups and put them in a new group. Continue forming new groups in this way until all students are in new groups. Each new group will have no more than eight students.
4.
Have the students exchange questions and take one another’s tests.
5.
Have the students score their tests and discuss the answers.
II. Close the session Announce the place and time of the Final Exam.
Instructor’s Notes
Final Exam Activities Final Exam Outline NOTE: This final exam session is designed for instructors who are teaching this book as part of a credited course from the Educational Institute. If your students are not enrolled in this course with the Institute, much of what follows will not apply to your situation. I.
Administer the Final Exam and conclude the course A. Reminder If you collected the Final Exam answer sheets at the beginning of the course, you should distribute them to the students at the time of the exam. B. Encourage students to take other courses Remind students that by getting more training and developing their abilities and attitudes, they will be contributing to their own success and to the future of the hospitality industry. If available, give students a copy of the most current Educational Institute course listings and recommend that they take more courses through: 1.
Correspondence with the Educational Institute as a Distance Learning student
2.
Local Educational Institute chapters
3.
A local college that offers courses in the hospitality field
Remind students about the criteria for obtaining Professional Certification through the Educational Institute of AH&LA: •
Certified Hotel Administrator (CHA)
•
Certified Lodging Manager (CLM)
•
Certified Hospitality Supervisor (CHS)
•
Certified Food and Beverage Executive (CFBE)
•
Certified Rooms Division Executive (CRDE)
•
Certified Hospitality Housekeeping Executive (CHHE)
•
Certified Hospitality Sales Professional (CHSP)
•
Certified Engineering Operations Executive (CEOE)
•
Certified Human Resources Executive (CHRE)
•
Certified Lodging Security Director (CLSD)
•
Certified Lodging Security Supervisor (CLSS)
•
Certified Hospitality Trainer (CHT)
•
Certified Hospitality Department Trainer (CHDT)
•
Certified Gaming Supervisor (CGS)
•
Master Hotel Supplier (MHS)
C. Explain exam policies and procedures Students must use a NUMBER TWO (soft lead) pencil. Tests are electronically scored, and unless answer sheets are marked correctly, students will not get credit for their answers.
Instructor’s Notes
Final Exam Outline Ask students to properly fill in the blanks on the answer sheet. THEY SHOULD PRINT ALL INFORMATION REQUIRED BY THE FORM. Read aloud the exam instructions printed on the answer sheet. Answer any questions students may have concerning the exam instructions. The Final Exam is a proctored test and must be administered in a supervised setting. Do not allow students to refer to texts, other course materials, notes, or each other for answers. D. Administer the Final Exam Remain in the classroom to supervise the session. E. Collect completed answer sheets and exam materials. Record absentees and include their names in your report to the Institute. F.
Exam security When the Final Exam is completed, collect and secure or destroy copies of the exam in order to protect the integrity of the test.
G. Final remarks Tell students when and where they can obtain their certificates and how they can find out their Final Exam scores. H. Mail all exams, your completed class roster, and your completed “Instructor’s Questionnaire” (which follows this session outline) to the Educational Institute. The address of the Educational Institute is as follows: American Hotel & Lodging Educational Institute 2113 N. High St. Lansing, MI 48906 The Educational Institute will grade the exams and issue a certificate to each student who passes the course. The exam results and certificates will be mailed directly to you.
Instructor’s Notes
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**Instructors** Help us make this guide more flexible and effective! Let us know what works for you! Send us your ideas for additional classroom activities (case studies, role plays, etc.) and other instructional techniques. We hope to send you annual updates for your Instructor’s Guide, which will include as many as possible of the usable contributions we receive, in addition to any new information related to the subject area. If your ideas are used, you and your school or property will be listed as contributors. We rely heavily on your feedback and appreciate your help. Please send ideas to George Glazer, Senior Vice President, Research and Development, The Educational Institute, 2113 North High Street, Lansing, MI 48906.
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Suggested Course Schedule, Quarter System The length of a course at a school using the quarter system is typically 10 weeks, plus a one-week final exam period. For instructors operating under the quarter system, we suggest the following schedule: Week 1 Chapter 1 Chapter 2
Course Introduction Hotel Revenue Accounting Hotel Expense Accounting
Week 2
Chapter 3 Chapter 4
Property and Equipment Accounting Other Noncurrent Assets Accounting
Week 3
Chapter 5 Chapter 6
Hospitality Payroll Accounting Hotel Departmental Statements
Week 4
Chapter 7 Chapter 8
Hotel Income Statements Ratio Analysis: Income Statement
Week 5
Chapter 9 Chapter 10
Hotel Balance Sheets Ratio Analysis of the Balance Sheet
Week 6
Chapter 11 Chapter 12
Statement of Cash Flows Interim and Annual Reports
Week 7
Chapter 13 Chapter 14
Budgeting Expenses Forecasting Sales
Week 8
Chapter 15 Chapter 16
Budgetary Reporting and Analysis Financial Decision-Making
Week 9
Chapter 17 Chapter 18
Cash Management and Planning Casino Accounting
Week 10
Chapter 19 Chapter 20
Inventory Accounting Assorted Topics FINAL EXAM
vi
Suggested Course Schedule, Semester System The length of a course at a school using the semester system is typically 15 weeks. For instructors operating under the semester system, we suggest the following schedule: Week 1 Chapter 1
Course Introduction Hotel Revenue Accounting
Week 2
Chapter 2
Hotel Expense Accounting
Week 3
Chapter 3 Chapter 4
Property and Equipment Accounting Other Noncurrent Assets Accounting
Week 4
Chapter 5
Hospitality Payroll Accounting
Week 5
Chapter 6 Chapter 7
Hotel Departmental Statements Hotel Income Statements
Week 6
Chapter 8
Ratio Analysis: Income Statement
Week 7
Chapter 9 Chapter 10
Hotel Balance Sheets Ratio Analysis of the Balance Sheet
Week 8
Chapter 11
Statement of Cash Flows
Week 9
Chapter 12
Interim and Annual Reports
Week 10
Chapter 13
Budgeting Expenses
Week 11
Chapter 14 Chapter 15
Forecasting Sales Budgetary Reporting and Analysis
Week 12
Chapter 16
Financial Decision-Making
Week 13
Chapter 17
Cash Management and Planning
Week 14
Chapter 18 Chapter 19
Casino Accounting Inventory Accounting
Week 15
Chapter 20
Assorted Topics FINAL EXAM
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Instructional Aids Information Instructors can develop greater variety in their presentation by employing either an appropriate audiovisual aid or a different teaching-learning method. Brief information about some of the available audiovisual aids and various teaching-learning methods that can be used advantageously is presented here. It is suggested that instructors who are interested in using a particular device or method obtain further information at local libraries or from the manufacturers of particular equipment. Chalkboard: Chalkboards are useful for developing lists based on the current group discussion or lecture and for presenting data for problems, diagrams, etc. Flip Chart: Where no chalkboard is available, a blank flip chart of newsprint or other paper can serve the same purpose. Colored crayon or laundry marker-type pens can be used for writing. When preprinted, these charts can serve to focus group attention on a subject or question for discussion. Topical content can be developed for accompanying a lecture. Care should be taken to make lettering large enough to be seen easily and to avoid putting too much writing on any one page. The flip chart also provides for a ready review, since the recording is more or less permanent. Film, Filmstrip, and Slides (with or without sound accompaniment): Various factors should be considered when selecting a film, a filmstrip, or a series of slides. These include appropriateness of the subject matter, age, running time, size (in millimeters), whether color or black-and-white, and sound accompaniment. Appropriate projection equipment should be tested for operation and focus prior to the session. Be sure to have spare lamps, exciter bulbs, and an extension cord on hand. The room should be equipped with adequate electrical outlets and allow for maximum convenience in dimming the lights and projection. Overhead Projectors (opaque or transparency): Transparency projection does not require dimming of the room; opaque projection usually does. Special transparent slides must be secured or made in advance for transparency projectors. Methods for making low-cost transparencies from preprinted material or drawings are available. Opaque projections can be used to show large images from existing materials. Blank cellophane or clear plastic can be used with a transparency projector to project images of material being written by the instructor as a substitute for a chalkboard or flip chart. It should be convenient to dim room lights, electrical outlets should be available, and an extension cord and spare lamps should be on hand. If you have access to an LCD projector, you may wish to visit EI’s Internet site at http://www.ei-ahla.org to view additional resources. Videotape/DVD: Video can be a highly effective medium because it allows for the complete visual representation of activities that may be difficult to describe clearly in print alone or even with the aid of still photographs. Playback units should be tested prior to the session. Displays: Displays are effective when dynamic, well-lighted, and colorful. Lectures must be carefully prepared to support displays. Displays require much preparation and are costly. Panel Presentations: Groups of experts can present information or answer questions. These presentations are useful for supplementing the instructor’s knowledge. Additional: Student reports, projects, reading assignments, and handout materials can be used to reinforce printed material or to prepare for succeeding sessions.
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Instructional Kit for Accounting for Hospitality Managers These Educational Institute materials are included in the Instructor’s Kit for this course: 1.
Text: Accounting for Hospitality Managers, Fifth Edition, by Raymond Cote.
2.
Instructor’s Guide: This guide includes 20 chapter sessions.
3.
Optional test questions on hard copy and disk.
Build Your Reputation for Classroom Excellence! The award-winning Certified Hospitality Educator (CHE) program—the only professionaldevelopment opportunity designed specifically for hospitality educators—enables you to: •
Discover the newest, most effective instructional techniques
•
Receive recognition for your teaching abilities from students, colleagues, and the hospitality industry
•
Network with peers from around the world
•
Strengthen your students’ critical thinking skills
When you become certified, you are entitled to use the CHE designation after your name to signify your status. You also receive an internationally recognized lapel pin and plaque— tangible proof of your commitment to excellence in hospitality education. The CHE program is recommended by the Council on Hotel, Restaurant and Institutional Education (CHRIE), the Club Managers Association of America (CMAA), and the American Culinary Federation’s Educational Institute. To learn more about the four-day, hands-on workshop that leads to certification—and how CHE certification can benefit your career as well as your students’ futures—contact EI’s Professional Certification Department at 1-888-575-8726.
Course Introduction Introduction Outline NOTE: This introductory session is designed for instructors who are teaching this book as part of a credited course from the Educational Institute. If your students are not enrolled in this course with the Institute, much of what follows will not apply to your situation. However, you may still find some sections useful, especially section IV. I.
Registration A. Collect applications and check pre-registration against the students present. Go through each application to make sure it has been completely filled out. B. To avoid confusion later, take time now to mark tuition received with each application. If tuition is paid in cash, have clips and envelopes on hand to keep applications and money together. C. Pass out index cards and have each student list the following information: 1.
Name
2.
Business affiliation and current position, if any
3.
Hospitality industry background
These cards may be useful to you in grouping students throughout the course. II. Introduction A. Students Have the students introduce themselves and summarize their index card information. If possible, use table cards with names for the first few sessions. B. Instructor Introduce yourself and briefly go over your background in the hospitality industry. Focus on any managerial positions you may have held. III. Orientation A. Discuss pertinent administrative details 1.
The number and length of class meetings
2.
The building and classroom number
3.
Break times
4.
Designated parking areas
5.
Time of class meetings
6.
Any other pertinent information
B. Distribute course materials Course materials should be given only to those students who have paid their enrollment fee in full. Allow the students to leaf through this material for a few moments. (Be sure to follow up on those students who have not paid.) C. Identify course materials Textbook: Accounting for Hospitality Managers, Fifth Edition, by Raymond Cote. Point out that the textbook will be the main source for reference and reading. Explain that the competencies at the beginning of each chapter describe what the students should know after studying the chapter.
Instructor’s Notes
2
Introduction
Introduction Outline D. Tests Announce any plans you have for administering tests, such as the Optional Tests included in this guide for each chapter session. E. Class preparation Stress the importance of preparatory reading and study for each session. Point out the need to do assignments faithfully, since subsequent assignments often build on material in prior lessons. F.
Class participation Encourage students to take an active role in most learning sessions. However, minimize discussion unrelated to the subject of the session. Cover all topics before allowing slight digressions. While it is not always easy to control the discussion, you must not neglect any major topics that may be included on the Final Exam.
G. Final Exam If you plan to use the Optional Tests, emphasize that students can begin to prepare for the Final Exam with their first test, since exam questions will be similar to Optional Test questions. Indicate that the Final Exam will cover material in the textbook and that not all of the questions on the Final Exam will necessarily be covered in class. Point out that any optional work you may assign will not necessarily be included on the Institute’s Final Exam. If you will be preparing your own exam, point out the areas it will cover. Tell students that AH&LA Certificates of Completion are awarded to students who successfully complete the Final Exam. Successful completion means scoring 70 percent or better. “With honors” is inscribed on the certificates of those students who score 90 percent or better. Explain that students who score less than 70 percent on the Final Exam have unsuccessfully completed the course. They may retake the exam once at no extra charge. Further retakes are available at an additional charge. Final exam results are sent to instructors on an academic grade report. Retake request forms are included if appropriate. The Final Exam is a proctored test and must be administered in a supervised setting. H. Final Exam answer sheet Explain that the Educational Institute courses are shrink-wrapped in plastic with an official certification application/exam answer sheet. Only those students who purchase new materials with the original Final Exam answer sheets will be eligible to receive certification. Answer sheets that are duplicated in any manner will not be graded or returned to the student. You should: 1.
Ask the students to print their names on the certification applications/exam answer sheets as they would like them to appear on their course certificates.
2.
Collect the exam answer sheets and put them in a safe place until you are ready to administer the Final Exam.
Instructor’s Notes
Introduction
Introduction Outline I.
Your role as instructor Explain to the students what you perceive your role to be. Candidly inform the students that you may not know all the answers to their questions, but that you will attempt to obtain answers or at least provide the students with a reference. Problems and solutions vary from property to property, and therefore it is impossible to provide exact answers that would apply to all situations. Explain your role as instructor in terms of being a coordinator of information and a facilitator of class discussions.
IV. Course purpose Explain that this course is designed to provide students with a basic understanding of accounting concepts that managers within the hospitality industry need. A. Read the Table of Contents of the course textbook, Accounting for Hospitality Managers, Fifth Edition. Inform students that questions on the Final Exam will cover material within the chapters of the text. B. Inform students that at the completion of this course, they should be able to: • • • • • • • • • • • • • • • • • •
Explain how revenue and expenses are accounted for in hospitality operations. Describe the considerations involved in property, equipment, and other non-current asset accounting. Outline and apply the significant elements of payroll accounting. Recognize and use departmental statements or schedules. Read and analyze hotel income statements. Read and analyze hotel balance sheets. Read and analyze the statement of cash flows. Describe the types and purposes of interim and annual reports, including the role of an audit service. Outline the process of budgeting expenses and the elements that must be considered. Describe and use various models to forecast sales for hospitality operations. Distinguish between and use master, flexible, and capital budgets, and apply variance analysis techniques. Analyze several important types of managerial decisions in order to make the best choice. Describe the process of cash management and planning. Outline aspects of casino accounting that make it different from typical hospitality accounting. Understand and apply several methods of inventory accounting. Describe and use allocation methods. Explain the nature of fair value accounting and how it differs from historical cost accounting. Use present and future value tables appropriately.
V. Close the session Announce the time and place of the next session.
3
Instructor’s Notes
Accounting for Hospitality Managers Instructor’s Questionnaire Please use this form to indicate your comments and suggestions concerning the Educational Institute’s instructional format. 1. In general, the instructional format was: ____Excellent
____Good
____Average
____Poor
Comments: __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ 2. The instructions for specific in-class group activities were: ____Excellent
____Good
____Average
____Poor
Comments: __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ 3. The instructions for specific out-of-class activities were: ____Excellent
____Good
____Average
____Poor
Comments: __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ 4. The most effective in-class activity was: __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ 5. The least effective in-class activity was: __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________
6. The most effective out-of-class activity was: __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ 7. The least effective out-of-class activity was: __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ 8. Do you feel this instructional format helps you teach effectively? __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ 9. Did you utilize any of the suggested guest speakers? __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ 10. Additional comments: __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________
Please mail to: American Hotel & Lodging Educational Institute Academic Publications Department 2113 N. High St. Lansing, MI 48906
Hotel Revenue Accounting Sample Lesson Plan Transparency Masters: Transparency Master 1: Competencies for Hotel Revenue Accounting Transparency Master 2: Hotel Income Competency 1:
Define revenue centers, identify examples of revenue centers in a hospitality business, and explain their roles in financial reporting. (pp. 4–6) Key Concepts: Revenue centers Major: Rooms, Food, Beverage Minor: telecommunications, garage, gift shop, newsstand, valet, laundry, barber/beauty shop, recreation, other operated departments Minor: may be leased to concessionaires Support centers Reporting areas; separate areas/reports/accounts Transparency Masters: Transparency Master 3: Categories of Revenue Centers Transparency Master 4: Food Sales Accounts Transparency Master 5: Beverage Sales Accounts
Competency 2:
Define revenue accounts, identify examples of revenue accounts for a hospitality business, and explain net revenue and gross profit. (pp. 6–9) Key Concepts: Revenue: results from sales of goods and services for cash or promise to pay Realization principle: sale recognized after services and products delivered and accepted Deposits are not sales Hotel revenue accounts: room, food, beverage, and telecommunications sales; and room, F&B, and telecommunications allowances contra revenue accounts; other accounts for income Net revenue: sales less allowances Gross profit: net revenue less cost of sales Transparency Masters: Transparency Master 6: Revenue Accounts
Competency 3:
Identify what is meant by trade discounts and cash discounts, and explain their relevance to a hospitality business. (pp. 9–12) Key Concepts: Trade discounts: price reductions Cash discounts depend on payment within a specified period, exclude freight charges ROG EOM Prox. Text Exhibits: Exhibit 1: Explanation of Discount Terms
Competency 4:
Describe two methods for recording invoices involving discounts and two procedures for recording cash discounts. (pp. 12–15) Key Concepts: Recording invoices with discounts Gross method Net method Recording cash discounts: Revenue procedure/nonrevenue procedure
2
Hotel Revenue Accounting
Competency 5:
Explain the common internal control forms and procedures involved in food and beverage sales. (pp. 15–21) Key Concepts: Guest checks: manual and automated Cash control in dining room and lounge Point-of-sale systems: order entry, billing, internal control Debit and credit cards Bankcards Nonbank credit cards Guest charges/tips Text Exhibits: Exhibit 2: Sample Allowance Voucher Exhibit 3: Sample Guest Check Exhibit 4: Sample Servers’ Signature Book Exhibit 5: Sample Guest Check—POS System Exhibit 6: Sample American Express Draft Transparency Masters: Transparency Master 7: Internal Control for Food and Beverage Sales
Competency 6:
Describe the difference between the guest ledger and the city ledger. (pp. 21–22) Key Concepts: Guest ledger (registered) Guest ledger accounting aka front office accounting Guest folios City ledger (nonregistered) Text Exhibits: Exhibit 7: Sample Guest Folio
Competency 7:
Identify three front office personnel who report to the accounting department, and describe the roles they play in providing hospitality accounting information. (pp. 22–26) Key Concepts: Accounts receivable clerk posts charges Charge vouchers Cashier receives payments Cash-in and cash-out transactions Night auditor enters, verifies charges: daily transcript report Reports: daily room, housekeeper’s, daily transcript Text Exhibits: Exhibit 8: Sample Charge Voucher Exhibit 9: Sample Automated Telephone Voucher Exhibit 10: Sample Daily Room Report Exhibit 11: Sample Housekeeper’s Report Exhibit 12: Sample Front Office Cash Receipts and Disbursement Journal Exhibit 13: Sample Daily Transcript Report
Competency 8:
Describe the system used for cash and data collection in a hospitality business. (pp. 26–32) Key Concepts: From each operated department: daily cashiers reports Cashiers forward receipts to general cashier General cashier prepares deposit summary, deposits funds, settles “due backs” Income auditor prepares daily report of revenue Departmental revenue report Summary sales and cash receipts journal
Hotel Revenue Accounting
Allowances journal Text Exhibits: Exhibit 14: Sample Cashier’s Deposit Slip Exhibit 15: Sample General Cashier’s Deposit Summary Exhibit 16: Sample Daily Report of Revenue Exhibit 17: Sample Departmental Revenue Report Exhibit 18: Sample Summary Sales and Cash Receipts Journal Exhibit 19: Sample Allowances Journal
Optional Class Activities Suggested Guest Speakers Have students visit a large hotel in your community and interview front desk personnel about their relationship to the accounting department. Or invite a hotel representative to visit your class and discuss this topic. Discussion questions could include: • • • •
What areas of responsibility do various front desk personnel have with regard to accounting procedures? What reports do they prepare on a daily basis? What sources of information do they use to prepare the reports? Who is responsible for preparing the various reports?
Individual/Group Activities Activity 1 Have each student complete Handout 1–1, “Exercises for Chapter 1.” Correct the assignments using the following answer key and return them, or go over the answers in class. Activity 1—Answer Key Exercise 1 a.
b.
c.
Exercise 2 a.
b.
c.
Food Purchases Accounts Payable
900
Accounts Payable Cash
900
Accounts Payable Cash Food Purchases
900
Food Purchases Accounts Payable
882
Accounts Payable Discounts Lost Cash
882 18
Accounts Payable Cash
882
900
900
882 18
882
900
882
3
4
Hotel Revenue Accounting
Exercise 3 a. b. c. d. e. f.
1/25 (1/15 invoice date ) 10 days) 3/27 (3/17 invoice date ) 10 days) 4/18 (10 days from receipt of goods 4/8) 6/28 (10 days from receipt of goods 6/18) 9/10 (8/1 invoice, 2/10 EOM + 9/10) 9/10 (8/1 invoice, 2/10 Prox. + 9/10)
Hotel Revenue Accounting
5
HANDOUT 1-1: Exercises for Chapter 1 Exercise 1
An operation uses the periodic inventory accounting method. Discounts are to be recorded by the gross method (nonrevenue treatment). A $900 invoice for food provisions is received; credit terms are 2/10, n/30. a.
Record the receipt of the invoice. _______________________________ _______________________________
b.
____________
Record the payment of the invoice if paid after the discount period. _______________________________ _______________________________
c.
____________
____________ ____________
Record the payment of the invoice if paid within the discount period. _______________________________
____________
_______________________________
____________
_______________________________
____________
Exercise 2
An operation uses the periodic inventory accounting method. Discounts are to be recorded by the net method (nonrevenue treatment). A $900 invoice for food provisions is received; credit terms are 2/10, n/30. a.
Record the receipt of the invoice. _______________________________ _______________________________
b.
____________ ____________
Record the payment of the invoice if paid within the discount period. _______________________________ ____________ _______________________________
____________
6
Hotel Revenue Accounting
Exercise 3
Give the latest date on which the discount is allowed. Invoice Date
Date Goods Received
Last Day for Credit Terms
a. 1/15 b. 3/17 c. 4/10 d. 6/15 e. 8/1 f. 8/1
1/16 3/15 4/8 6/18 8/2 8/2
2/10, n/30 2/10, n/30 2/10, n/30 ROG 2/10, n/30 ROG 2/10, n/30 EOM 2/10, n/30 Prox.
Discount
Hotel Revenue Accounting
Answers to Review Questions The answers to the review questions in the text are in the “Solutions” section at the end of this Instructor’s Guide.
Answers to Problems The answers to the problems in the text are in the “Solutions” section at the end of this Instructor’s Guide.
Solution to Case Study The solution to the case study in the text is in the “Solutions” section at the end of this Instructor’s Guide.
Optional Test A ready-to-use test containing questions related to the competencies covered by this chapter is included in this session. These questions are similar in format and content to the questions on the Final Exam that the Educational Institute provides and grades for students who are enrolled in this course with the Institute. (If your students are not enrolled in the Institute’s course, they will not receive this Final Exam.) The answers to this session’s optional test are: 1-a-C1, 2-c-C1, 3-b-C2, 4-b-C3, 5-a-C4, 6-b-C4, 7-a-C4, 8-c-C6, 9-b-C6, 10-c-C6 Each question is linked to a competency. Competencies are listed on the first page of the chapter and in the Sample Lesson Plan. An answer reading 3-b-C4 translates to: 3: the question number b: the correct answer C4: the competency number The pages in the text that are associated with this chapter’s competencies are as follows: C1: C2: C3: C4: C5: C6: C7: C8:
4–6 6–9 9–12 12–15 15–21 21–22 22–26 26–32
Note that the answers to test questions may not appear verbatim on the referenced pages. Test questions may assess the examinees’ ability to apply a concept, not just their knowledge of the concept. These questions can also be found on the CD-ROM in Rich Text Format (.rtf) files that most word processing programs can open and read. You can use these questions as a starter to create your own tests.
7
8
Hotel Revenue Accounting
Hotel Revenue Accounting NAME _____________________________________________________ DATE _________________________________ 1.
The sale of food to guests in the lounge is recorded to: a. food sales. b. bar sales. c. concierge sales. d. other income.
2.
Commissions from outside guest laundry services are shown on the: a. rooms department statement. b. other operating department statement. c. schedule of rentals and other income. d. marketing department statement.
3.
If net sales are $1,000, food cost is $300, and labor cost is $200, gross profit: a. is $1,000. b. is $700. c. is $500. d. cannot be determined from the given information.
4.
If an invoice is dated March 26 with terms of 6/15, n/30 EOM, the last day the discount can be taken is: a. April 15. b. May 15. c. June 15. d. June 30.
5.
Using the gross method to record invoices, a May 29 invoice for supplies inventory of $500 with a 2% discount in 10 days is: a. recorded as accounts payable of $500. b. recorded as accounts payable of $490. c. not recorded until it is paid. d. recorded as cash discounts earned of $10.
6.
Using the net method to record invoices, a May 29 invoice for supplies inventory of $500 with a 2% discount in 10 days is: a. b. c. d.
7.
recorded as accounts payable of $500. recorded as accounts payable of $490. not recorded until it is paid. recorded as cash discounts earned of $10.
Under the revenue treatment of recording discounts, which procedure is used to record the discount on an invoice for food purchases of $300 with a 2% discount? a. b. c. d.
The discount is recorded to a Cash Discounts Earned account. The discount is recorded as a reduction of food cost. The discount is recorded as an increase to sales revenue. The discount is not recorded.
Hotel Revenue Accounting
8.
A registered guest is charging a meal at the hotel’s restaurant. The meal charge will be posted in the: a. b. c. d.
9.
general ledger. city ledger. guest ledger. daily rooms report.
An F&B customer who is not a registered guest is charging a meal at the hotel’s restaurant. The meal charge will be posted in the: a. b. c. d.
general ledger. city ledger. guest ledger. daily rooms report.
10. A registered guest is checking out and paying all charges with a personal check. The payment is recorded in the: a. b. c. d.
general ledger. city ledger. guest ledger. daily rooms report.
9
10
Hotel Revenue Accounting
Competencies for Hotel Revenue Accounting 1.
Define revenue centers, identify examples of revenue centers in a hospitality business, and explain their roles in financial reporting.
2.
Define revenue accounts, identify examples of revenue accounts for a hospitality business, and explain net revenue and gross profit.
3.
Identify what is meant by trade discounts and cash discounts, and explain their relevance to a hospitality business.
4.
Describe two methods for recording invoices involving discounts and two procedures for recording cash discounts.
5.
Explain the common internal control forms and procedures involved in food and beverage sales.
6.
Describe the difference between the guest ledger and the city ledger.
7.
Identify three front office personnel who report to the accounting department, and describe the roles they play in providing hospitality accounting information.
8.
Describe the system used for cash and data collection in a hospitality business.
Transparency Master 1
Hotel Revenue Accounting
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Hotel Income Revenue (Sales) – All expenses = Income
Transparency Master 2