Managerial Accounting For The Hospitality Industry, 2nd Edition

Description

Following a successful debut edition, this new Second Edition of Managerial Accounting for the Hospitality Industry builds on its strengths of clear organization and the ease with which students work through it. This new edition includes more basic math support for students and a more developed inclusion of ethical considerations and global changes both in accounting systems and in the hospitality industry. 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