Chapter 2 tackles financial reporting in the hospitality industry. The specific topics covered include accounting as the language of business, financial statements, management reports and accounting system. This chapter is a recap of basic accounting rules and financial statements analyzed in a typical managerial accounting class. | Chapter 2 Financial Reporting Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Chapter Overview Accounting as the language of business Accounting standards and principles Uniform systems of accounts Financial statements Income statement Balance sheet Statement of cash flow Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Chapter Overview cont. Management reports Daily revenue report Daily payroll cost report Rooms revenue forecast Food and beverage menu abstract Accounts receivable aging schedule Accounting system - CP3 system Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Types of Accounting Financial Accounting Focuses on financial statements Must present: financial condition of the company operating results Managerial Accounting Provide timely operating results Focuses on: Revenues and expenses Maximizing operating performance Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Accounting Standards Develop Standards Financial Accounting Standards Board (FASB) Securities and Exchange Commission (SEC) Generally Accepted Accounting Principles (GAAP) Govern all accounting and financial reporting Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Accounting Principles Cost Principle All transactions must be recorded at cost Full Disclosure Principle Events that could impact a company’s financial position should be reflected on financial statements or footnotes Revenue Recognition Principle Revenues should be recorded in the month they are earned Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Accounting Principles cont. Matching Principle All expenses incurred in generating a revenue should be recorded in the period the revenue is earned Monetary Unit Principle Only transactions that can be expressed in terms of money can be shown on a company’s financial statements Economic Entity Principle Separates the dealings of a business from the private dealings of its owners Copyright © . | Chapter 2 Financial Reporting Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Chapter Overview Accounting as the language of business Accounting standards and principles Uniform systems of accounts Financial statements Income statement Balance sheet Statement of cash flow Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Chapter Overview cont. Management reports Daily revenue report Daily payroll cost report Rooms revenue forecast Food and beverage menu abstract Accounts receivable aging schedule Accounting system - CP3 system Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Types of Accounting Financial Accounting Focuses on financial statements Must present: financial condition of the company operating results Managerial Accounting Provide timely operating results Focuses on: Revenues and expenses Maximizing operating performance Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved Accounting Standards Develop Standards .
