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Hospitality Financial AccountingWeek 1Part 1
Hospitality Accounting in Action
Matakuliah : V0232 – Akuntansi Keuangan HotelTahun : 2009
1-1 Accounting ProcessIdentification
(Select economic events/
transactions)
Recording(Record,
classify, and summarize)
Communication(Prepare
reports; analyze and interpret)
Internal Users External Users
Investors/creditors
Present & potentialInvestorsCreditors
Other UsersTaxing authorities
Regulatory agenciesLabor unions
Economic planners
Management
Managers,supervisors, andcompany officers
1-2 Bookkeeping vs. AccountingBookkeeping
Involves only the recording of economic events
Just one part of the accounting process
Accounting
Involves identifying, recording, and communicating economic events
Types of Accounting:• Financial• Managerial
1-3 AssumptionsMonetary Unit Assumption
Only transaction data that can be expressed in terms of money can be included in the accounting records
Economic Entity AssumptionActivities of the entity must be kept separate from activities of the owner
1-4 The Accounting EquationASSETS = LIABILITIES + STOCKHOLDERS’ EQUITY
Assets are resources thatpossess future
economicbenefits.
Liabilities are creditor claims
on the assets andrepresent the debtsand obligations of
the entity.
Stockholders’ equity isthe stockholder’s residual
claim on totalassets.
TOTAL
ASSETS Stockholder’s claims on assets
Creditor claimson assets
= +
1-5 The Accounting CycleSteps in the Accounting Cycle1. Analyzing Transactions2. Journalizing3. Posting4. Trial Balance5. Adjustments6. Adjusted Trial Balance7. Financial Statements8. Closing Entries9. Post Closing Trial Balance
1-6 Uniform SystemsHotels
Uniform System of Accounts for the Lodging Industry
ClubsUniform System of Financial Reporting for Clubs
RestaurantsUniform System of Accounts for Restaurants
SpasUniform System of Financial Reporting for Spas
Hospitality Financial Accounting
Part 2Accounting Principles
2-1 Conceptual FrameworkCONSTRAINTSCONSTRAINTS
Objectives of Financial ReportingObjectives of Financial Reporting
QualitativeQualitativeCharacteristics ofCharacteristics of
Accounting InformationAccounting InformationElements ofElements of
Financial StatementsFinancial Statements
Operating GuidelinesOperating GuidelinesAssumptionsAssumptions PrinciplesPrinciples
CONSTRAINTSCONSTRAINTS
2-2 Qualitative Characteristics of Accounting Information
UsefulUsefulFinancialFinancial
Information has:Information has:
1. Predictive value1. Predictive value2. Feedback value2. Feedback value3. Timely3. Timely
RelevanceRelevance
1. Verifiable1. Verifiable2. Faithful representation2. Faithful representation3. Neutral3. Neutral
ReliabilityReliability
ComparabilityComparabilityandand
ConsistencyConsistency
2-3 Operating GuidelinesDetailed Guidelines for Solving Practical ProblemsDetailed Guidelines for Solving Practical Problems
4. Going Concern4. Going Concern
3. Time Period3. Time Period
2. Monetary Unit2. Monetary Unit
1. Economic Entity1. Economic Entity
4. Cost4. Cost
3. Full Disclosure3. Full Disclosure
2. Matching2. Matching
1. Revenue Recognition1. Revenue Recognition
MaterialityMateriality ConservatismConservatismCONSTRAINTSCONSTRAINTS
andand
ASSUMPTIONSASSUMPTIONS PRINCIPLESPRINCIPLES
2-4 Recording Business Transactions
1. Invested $8,000 in his business in exchange for common stock.2. Purchased $500 of supplies for cash.3. Purchased $4,000 of equipment on account.4. Received $3,000 cash for consulting services.5. Paid salaries of $8006. Paid the first month’s rent of $200.7. Paid $1,000 owned to a creditor.8. The corporation paid a dividend of $1,500 in cash to Sam Doty, the stockholder.
A. Review of Selected TransactionsA. Review of Selected TransactionsMr. Sam Doty opened and incorporated a hospitality consulting firm during theMr. Sam Doty opened and incorporated a hospitality consulting firm during themonth of September and provided you with the following data.month of September and provided you with the following data.
Instructions: Prepare the tabular summary for the transactions above.Instructions: Prepare the tabular summary for the transactions above.
2-4 Recording Business Transactions (continued)
Answer:Answer:Summary of TransactionsSummary of TransactionsMonth of September 2008Month of September 2008
Assets = Liabilities + Stockholders’ Equity
Trans-action Cash +
Sup-plies +
Equip-ment =
Accounts Payable +
Common Stock
Retained Earnings
(1) +$8,000 +$8,000 Investment
(2) -500 +500
(3) +$4,000 +$4,000
(4) +3,000 +3,000 Service Revenue
(5) -800 -800 Salary Expense
(6) -200 -200 Rent Expense
(7) -1,000 -1,000
(8) -1,500 -1,500 Dividends
$7,000 + $500 + $4,000 = $3,000 + $8,000 $500
2-4 Recording Business Transactions (continued)
1.1. Prepare the Income Statement and Retained Earnings Prepare the Income Statement and Retained Earnings Statement from the Stockholders’ Equity Column of Statement from the Stockholders’ Equity Column of the the Summary of TransactionsSummary of Transactions for the month of for the month of September.September.
B. Financial Statement Relationship to Transactions and BalancesB. Financial Statement Relationship to Transactions and Balances
Stockholders’ EquityStockholders’ Equity
+ $8,000 (Investment by Stockholders)+ 3,000 (Service Revenue)- 800 (Salary Expense)- 200 (Rent Expense)- 1,500 (Dividends)
$8,500
2-4 Recording Business Transactions (continued)
Sam Doty
Hospitality Consultant
Income Statement
For Month Ended September 30, 2008
Revenues
Service revenue $3,000
Expenses
Salary expense $800
Rent expense 200
Total expenses 1,000
Net income $2,000
Sam Doty
Hospitality Consultant
Retained Earnings Statement
For Month Ended September 30, 2008
Retained Earnings, September 1 $ -0-
Add: Net income 2,000
2,000
Less: Dividends $1,500
Retained Earnings, September 30 $ 500
Answer:Answer:
2-4 Recording Business Transactions (continued)
2.2. Prepare the Balance Sheet from the Month-end Prepare the Balance Sheet from the Month-end Balances of the Balances of the Summary of TransactionsSummary of Transactions..
AssetsAssets
CashCash + + SuppliesSupplies + + Equip.Equip.$7,000 + $500 + $4,000$7,000 + $500 + $4,000
LiabilitiesLiabilities Stockholders’Stockholders’EquityEquity
Accounts PayableAccounts Payable$3,000$3,000
Common StockCommon Stock$8,000$8,000
R.E.R.E.$500$500
== ++
++++
++++
====
2-4 Recording Business Transactions (continued)
Sam Doty, Hospitality ConsultantBalance Sheet
September 30, 2008Assets
Cash $ 7,000Supplies 500Equipment 4,000 Total assets $11,500
Liabilities and Stockholders’ EquityLiabilities Accounts payable $ 3,000Stockholders’ Equity Common stock 8,000 Retained earnings 500 Total liabilities & stockholders’ equity $11,500
Answer:Answer:
2-4 Recording Business Transactions (continued)
3. Prepare the Statement of Cash Flows from the Cash Column of the Summary of Transactions for the month of September.
Sam Doty, Hospitality ConsultantStatement of Cash Flows for Month Ended September 30, 2008
Cash flows from operating activities Cash receipts from customers $3,000 Cash payments for expenses 1,000 Net cash provided by operating activities $2,000Cash flows from investing activities Purchase of supplies (500) Payment for equipment (1,000) (1,500)Cash flows from financing activities Sale of common stock $8,000 Dividends paid (1,500) 6,500Net increase in cash 7,000Cash at the beginning of the period 0Cash at the end of the period $7,000
2-5 Analyzing TransactionsIdentify the various transactions indicated by the information provided:
1. CASH ACCOUNTS RECEIVABLEincreased………………….. decreased_________________
2. RENT EXPENSE CASHincreased………………….. decreased_________________
3. SUPPLIES ACCOUNTS PAYABLEincreased………………….. decreased_________________
4. EQUIPMENT CASHincreased………………….. decreased_________________
5. ACCOUNTS RECEIVABLE REVENUEincreased………………….. decreased_________________
6. DIVIDENDS CASHincreased………………….. decreased_________________
2-5 Analyzing Transactions (continued)
Continue exercise by asking students for a transaction which Continue exercise by asking students for a transaction which increases the following:increases the following: Cash, Accounts Receivable, Supplies, Equipment, Cash, Accounts Receivable, Supplies, Equipment,
Accounts Payable, Common StockAccounts Payable, Common Stock
Continue exercise by asking students for a transaction whichContinue exercise by asking students for a transaction whichdecreases the following:decreases the following: Cash, Accounts Receivable, Supplies, and Cash, Accounts Receivable, Supplies, and
Accounts PayableAccounts Payable
2-5 Analyzing Transactions (continued)
1. Collection of an accounts receivable.2. Payment of the current month’s rent.3. Purchase of supplies on account.4. Purchase of equipment for cash.5. Rendering of services for a customer on account.6. The declaration of a cash dividend.
AnswerAnswer::