Self-Study
19
Overview
Accounting
There are no prerequisites.

Course Description

The hospitality industry is subject to a unique mix of issues, including seasonal demand, high fixed costs, rapid inventory turnover, and labor-intensive processes. The accountant needs to operate an accounting system that is specially tailored to this environment. In Hospitality Accounting, instructor Steven M. Bragg describes the financial and managerial accounting aspects of a hospitality business, which includes hotels, restaurants, spas, and similar businesses.

The course familiarizes the accountant with basic concepts, addresses various types of financial statements, and describes the accounting needed to construct them. More detailed financial accounting topics include payroll, fixed assets, and payables. There are also many managerial accounting topics, such as the construction of a budget, price formulation systems, cost-volume-profit analysis, and cash management.



Instructor

Steven M. Bragg, CPA

Steven M. Bragg, CPA, is a full-time book and course author who has written more than 70 business books. He provides Western CPE with self-study courses in the areas of accounting and finance, with an emphasis on the practical application of accounting standards and management techniques. A sampling of his courses include the The New Controller Guidebook, The GAAP Guidebook, Accountants’ Guidebook, and Closing the Books: An Accountant’s Guide. He also manages the Accounting Best Practices podcast.

Steven has been the CFO or controller of both public and private companies and has been a consulting manager with Ernst & Young and an auditor with Deloitte & Touche. He holds an MBA from Babson College, a Master of Finance from Bentley College, and a BA from the University of Maine (summa cum laude).



Course Specifics

Accounting
Mar 20, 2018
There are no prerequisites.
SS1153414
395
None


Compliance Information

103220
Qualifies for CA Fraud: No


Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Cite the operating characteristics of the hospitality industry.

Chapter 2

  • State the intent of the accounting cycle.
  • Cite key accounting principles.
  • Cite the source of the information in the trial balance.

Chapter 3

  • Identify the different types, contents, and formats of the financial statements.

Chapter 4

  • Cite the different types of receivable and payable transactions.
  • Identify the documents associated with the processing of receivables and payables.

Chapter 5

  • Cite the forms used in the payroll process.
  • Identify the methods for calculating compensation and depositing tax remittances.

Chapter 6

  • Identify the types of inventory systems and cost layering methods.
  • Cite the calculations used to estimate ending inventory.

Chapter 7

  • Identify the costs included in fixed assets, and the concepts used in the calculation of depreciation.

Chapter 8

  • Identify the types of projects for which interest should be capitalized.
  • Identify when such capitalization should be terminated.

Chapter 9

  • Cite the items included in interest expense and the loan amortization table.

Chapter 10

  • Identify the tax reports associated with each type of business entity.

Chapter 11

  • Identify the costs considered to be startup costs.
  • Cite the advantages of selling gift cards to customers.

Chapter 12

  • Define types of controls.
  • Identify the controls that apply to each functional area of a business.

Chapter 13

  • Compare the types of pricing systems in use in the hospitality industry.
  • Identify the impact of inelastic demand on price setting.

Chapter 14

  • Identify the flaws in the ratios used to analyze the hospitality industry.

Chapter 15

  • Identify the types of costs of cost management.
  • Identify the benefits of cost management.

Chapter 16

  • Cite the calculations for contribution margin, breakeven, cost-volume-profit analysis, and sales mix variance.

Chapter 17

  • Identify the disadvantages of budgeting in general and flexible budgeting.
  • Perform the calculation of the different types of variances.

Chapter 18

  • State the components of the cost of capital, and the types of analysis techniques used in capital budgeting.

Chapter 19

  • Cite the information used to derive a lease rate.
  • Identify the conditions under which it makes the most sense to use different types of leases.

Chapter 20

  • Identify the advantages and disadvantages of a cash concentration system and a notional pooling system.
  • Identify the content of the short-term and medium-term cash forecasts.

Chapter 21

  • Cite the composition of the cash conversion cycle.
  • Identify ways to improve working capital cash flow.


Table of Contents

Chapter 1 – Introduction to Hospitality Accounting

Learning Objectives

Introduction

Characteristics of the Hospitality Industry

Hotel Organizational Structure

The Controller Job Description

Decisions Requiring Accounting Information

Financial and Managerial Accounting

The Structure of this Book

Summary

Chapter 1 – Review Questions

Chapter 2 – The System of Accounting

Learning Objectives

Introduction

Financial Accounting Basics

Accounting Frameworks

Accounting Principles

The Accounting Cycle

Accounting Transactions

Types of Transaction Cycles

Source Documents

Double Entry Accounting

The Accounting Equation

Journal Entries

The Accruals Concept

The Chart of Accounts

Major Journal Entries

The Ledger Concept

Posting to the General Ledger

General Ledger Overview

The Trial Balance

The Trial Balance Format

The Extended Trial Balance

The Realization Concept

Accrual Basis of Accounting

Cash Basis of Accounting

Converting Cash Basis to Accrual Basis Accounting

Summary

Chapter 2 – Review Questions

Chapter 3 – The Financial Statements

Learning Objectives

Introduction

Income Statement Overview

The Single-Step Income Statement

The Multi-Step Income Statement

The Multi-Period Income Statement

Hospitality Income Statement Format

The Balance Sheet

The Common Size Balance Sheet

The Comparative Balance Sheet

The Statement of Cash Flows

The Direct Method

The Indirect Method

Limitations of the Financial Statements

Summary

Chapter 3 – Review Questions

Chapter 4 – Receivables and Payables Accounting

Learning Objectives

Introduction

Accounting for Accounts Receivable

Accounting for Deposits

Accounting for Cash Sales

Remitting Sales Taxes

The Accounts Receivable Aging Report

Accounting for Bad Debts

Direct Write-Off Method

Allowance for Doubtful Accounts

Accounting for Accounts Payable

Accounting for Petty Cash

Petty Cash Transfer Form

Petty Cash Voucher

Petty Cash Book

The 1099 Vendor

Summary

Chapter 4 – Review Questions

Chapter 5 – Payroll Accounting

Learning Objectives

Introduction

Employee Time Tracking

Gross Pay Calculations

Hourly Rate Plan

Overtime

Tips

Types of Payroll Taxes

Social Security Tax

Medicare Tax

Unemployment Taxes

Income Tax Withholdings

Benefits and Other Deductions

Net Pay

Remitting Payroll Taxes

Types of Tax Deposit Schedules

Monthly Deposit Schedule

Semiweekly Deposit Schedule

Federal Unemployment Deposit Schedule

Remittance Method

The Form 941 Quarterly Federal Tax Return

State Tax Remittances

Payments to Employees

The Payroll Register

Form W-2

Payroll Journal Entries

Types of Payroll Journal Entries

Primary Payroll Journal Entry

Accrued Wages

Manual Paycheck Entry

Employee Advances

Accrued Vacation Pay

Tax Deposits

Summary

Chapter 5 – Review Questions

Chapter 6 – Inventory Accounting

Learning Objectives

Introduction

The Periodic Inventory System

The Perpetual Inventory System

The Physical Inventory Count

Inventory Cost Layering Overview

The First in, First Out Method

The Last in, First Out Method

The Weighted Average Method

Estimating Ending Inventory

Gross Profit Method

Retail Inventory Method

Cost of Food Consumed

Cost of Sales Account Classifications

Summary

Chapter 6 – Review Questions

Chapter 7 – Fixed Asset Accounting

Learning Objectives

Introduction

What are Fixed Assets?

Fixed Asset Classifications

Accounting for Fixed Assets

The Capitalization Limit

The Base Unit

The Initial Measurement of a Fixed Asset

The Purpose of Depreciation

Depreciation Concepts

Accelerated Depreciation

Sum-of-the-Years’ Digits Method

Double-Declining Balance Method

Straight-Line Method

Units of Activity Method

MACRS Depreciation

The Depreciation of Land

The Depreciation of Land Improvements

Depreciation Accounting Entries

Accumulated Depreciation

Asset Derecognition

Abandoned and Idle Assets

Asset Disposal Accounting

Summary

Chapter 7 – Review Questions

Chapter 8 – Interest Capitalization

Learning Objectives

Introduction

Overview of Capitalized Interest

When to Capitalize Interest

The Interest Capitalization Period

The Capitalization Rate

Calculating Interest Capitalization

Summary

Chapter 8 – Review Questions

Chapter 9 – Debt Accounting

Learning Objectives

Introduction

Basic Debt Accounting

The Amortization Schedule

Reconciling the Debt Account

Summary

Chapter 9 – Review Questions

Chapter 10 – Income Taxes

Learning Objectives

Introduction

Sole Proprietorship Taxes

Partnership Taxes

C Corporation Taxes

S Corporation Taxes

Tax Reduction Strategies for Small Businesses

Summary

Chapter 10 – Review Questions

Chapter 11 – Other Accounting Topics

Learning Objectives

Introduction

Startup Costs

Advertising Costs

Gift Cards

Summary

Chapter 11 – Review Questions

Chapter 12 – Controls

Learning Objectives

Introduction

The Proper Balance of Control Systems

The Nature of Risk

Control Principles

The Failings of Internal Controls

Preventive and Detective Controls

Manual and Automated Controls

Constructing a System of Controls

Common Fraud Risk Factors

Hospitality Industry Risk Characteristics

Hospitality Industry Fraud

Specific Controls

Controls for the Small Organization

Summary

Chapter 12 – Review Questions

Chapter 13 – Pricing Methodologies

Learning Objectives

Introduction

Price Elasticity of Demand

Cross Price Elasticity of Demand

Pricing Perception

Market-Based Pricing

Dynamic Pricing

Pricing Segmentation

Cost Markup Pricing (Meals)

Investment-Based Pricing (Room Rates)

Hubbart Formula (Room Rates)

Hubbart Formula (Meal Pricing)

Menu Engineering

Contribution by Meal Period

Discounting of Room Rates

Room Revenue Yield Analysis

Price Increase Considerations

Non-Profit Pricing

Summary

Chapter 13 – Review Questions

Chapter 14 – Ratio and Trend Analysis

Learning Objectives

Introduction

Interpretation of Financial Statements

Horizontal Analysis

Vertical Analysis

Current Ratio

Quick Ratio

Accounts Payable Turnover Ratio

Accounts Receivable Turnover Ratio

Inventory Turnover Ratio

Fixed Asset Turnover Ratio

Sales to Working Capital Ratio

Debt to Equity Ratio

Fixed Charge Coverage

Net Profit Ratio

Return on Net Assets

Hotel Operating Ratios

Paid Occupancy Percentage

Complimentary Occupancy Percentage

Average Occupancy per Room

Average Room Rate

Revenue per Available Room

Revenue per Available Customer

Hotel Market Share

Restaurant Operating Ratios

Seat Turnover

Average Food Service Check

Ratio of Beverage to Food Revenue

Limitations of Ratio Analysis

Summary

Chapter 14 – Review Questions

Chapter 15 – Cost Concepts

Learning Objectives

Introduction

The Economics of Cost Management

What is Cost?

Basic Cost Types

Fixed Costs

Variable Costs

Mixed Costs

Step Costs

Differential Costs

Discretionary Costs

Committed Costs

Sunk Costs

The Cost Allocation Conundrum

Advantages of Cost Management

Summary

Chapter 15 – Review Questions

Chapter 16 – Cost-Volume-Profit Analysis

Learning Objectives

Introduction

Contribution Margin

Breakeven Point

Margin of Safety

Cost-Volume-Profit Analysis

Cost-Volume-Profit Cautions

Sales Mix

Summary

Chapter 16 – Review Questions

Chapter 17 – Operations Budgeting

Learning Objectives

Introduction

The Advantages of Budgeting

The Disadvantages of Budgeting

The Operations Budget

The Operations Budget Format

Revenue Projections

Expense Projections

The Flexible Budget

Formulation of the Budget

The Long-Range Budget

Variance Analysis

Types of Variances

Selling Price Variance

Sales Volume Variance

Purchase Price Variance

Material Yield Variance

Labor Rate Variance

Operating without a Budget

Summary

Chapter 17 – Review Questions

Chapter 18 – Capital Budgeting

Learning Objectives

Introduction

Overview of Capital Budgeting

Time Value of Money

Present and Future Value Tables

Cost of Capital Derivation

Cost of Debt

Cost of Preferred Stock

Cost of Common Stock

Weighted Average Cost of Capital

Net Present Value Analysis

Terminal Value

Internal Rate of Return

Incremental Internal Rate of Return

Profitability Index

Breakeven Analysis

Payback Method

Real Options

Capital Expenditure Proposal Analysis

Information Recordation

Separate Spreadsheet

Separate General Ledger / Subledger Accounts

Separate Accounting Module

Summary

Chapter 18 – Review Questions

Chapter 19 – The Lease or Buy Decision

Learning Objectives

Introduction

The Lease Arrangement

The Lease or Buy Decision

Leasing Concerns

Leasing Advantages

Summary

Chapter 19 – Review Questions

Chapter 20 – Cash Management

Learning Objectives

Introduction

The Difference between Net Income and Cash Flow

The Bank Reconciliation

The Daily Bank Reconciliation

The Cash Forecast

The Short-Term Cash Forecast

The Medium-Term Cash Forecast

The Need for Cash Concentration

Cash Sweeping

The Zero Balance Account

Multiple Sweep Arrangements

Sweeping Rules

Sweep Costs

Summary

Notional Pooling

Notional Pooling Problems

Notional Pooling Costs

Summary

Cash Concentration Best Practices

Cash Concentration Alternatives

Accounting for Cash Concentration Transactions

Investments

Accounting for Investments - Dividends and Interest Income

Stock Dividends and Stock Splits

Noncash Dividends

Summary

Chapter 20 – Review Questions

Chapter 21 – Working Capital Management

Learning Objectives

Introduction

The Cash Conversion Cycle

Accounts Receivable Enhancements

Credit Enhancements

Billing Enhancements

Collection Enhancements

Accounts Receivable Policies

Inventory Enhancements

Inventory Policies

Accounts Payable Enhancements

Terms Renegotiation

Early Payment Discounts

Payment Processing Frequency

Accounts Payable Policies

Summary

Chapter 21 – Review Questions

Review Question Answers and Rationales

Glossary

Index

Qualified Assessment

Answer Sheet

Course Evaluation

 



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