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25 Cards in this Set
- Front
- Back
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Characteristics of hospitality industry
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Short distribution chain
Seasonal in nature Major investment in fixed assets Labor instensive |
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Major function of hospitality accounting
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Provides financial information, statements, and reports
Utilize uniform system of accounts |
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Cost Principle
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Requires recording the value of transactions for accounting pruposes at the actual transaction price.
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Business Entity
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Requires that a business maintain its own set of accounts that are separate from other financial interests of its owners.
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Going concern
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Requires the preparation of accounting records and reports under the assuption that the business will continue indefinitely and that liquidation is not in prospect; also referred to as continuity of the business unit
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Unit of measurement
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the monetary values stated in financial statements should represent a stable unit of value so that meaningful comparsons of current and past periods are possible
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Objective evidence
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the preferred basis of accounting transactions and the resulting accounting records
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Full disclosure
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requires that financial statements must provice info on all the significant facts that have bearing on their interpretation.
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Consistency
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Requires that once an accounting method has been adopted, it should be followed from period to period in the future unless a change in accounting methods is warranted and disclosed
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Matching
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Requires recording expenses in the same period as the revenues to which they relate.
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Conservatism Principle
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Requires accounting procedures that recognize expenses as soon as possible but delay the recognition of revenues until they are ensured.
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Materiality Principle
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Requires that events be recognized and recorded by accounting procedures if they make a difference as determined by some relative standard of comparison
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Cash basis vs. Accrual basis accounting
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cash basis: recognizes accounting transactions at the point of cash inflow or outflow
accrual: recognizes revenues when earned and expenses when incurred |
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Six branches of accounting
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financial
cost managerial tax auditing accounting systems |
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functions of financial accounting
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prepare statements
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functions of cost accounting
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monitor costs scattered within the chain
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functions of managerial accounting
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make decisions; plan ahead; operate business
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functions of auditing
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check prodecures and controls to see if they are operating properly
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what is the fundamental accounting equation
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Assets = Liabilities + Owner's Equity
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Normal Account Balances
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Asset ....Debit
Liability...Credit Owner's Equity....Credit Revenue....Credit Expenses....Debit |
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Four Basic Forms of Business Organizations
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Sole Proprietorship
Partnership Limited Partnership Corporation |
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Sole Proprietorship
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responsible for all the debts of that business
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Partnership
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agreement of 2 or more people (ownership defined by agreement)
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Limited partnership
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A person or people contribuutes funds to the business but doesn't want to do any decision making (general partner - responsible for all debts)
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Corporation
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has shareholders as owners of the business
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