Hotel Management Ch. 12 Hotel Accounting

Decentralized accounting

A financial management system that collects accounting data from an individual hotel site and combines and analyzes it at the same site

Centralized acocunting

A financial management system that collects accounting data from individual hotels, and then combines and analyzes the data at a different (central) site

Write-off

A guest's direct bill that is considered uncollectible by management and as a result is subtracted from the hotel's accounts receivable total

Accounts receivable aging

A process for determining the average length of time money is owed to a hotel because of a credit sale

Manager's daily (sales report)

A re-cap of the previous day's rooms, food and beverage, and other sales. The manager's daily may include additional hotel operating statistics as requested by the hotel's general manager

Short

A situation in which a cashier has less money in the cash drawer than the official sales records plus shift bank indicate should be available

Over

A situation in which a cashier has more money in the cash drawer than the official sales records plus shift bank indicate

House count

An estimate of the number of actual guests staying in a hotel on a given day

Audit

An independent verification of financial records

Certified Public Accountant (CPA)

An individual designated by the American Institute of Certified Public Accountants as competent in the field of accounting

Fiscal quarter

Any 3 month period within the 12 month period that makes up a company's operating year

Prepaid expenses

Expenditures made for items purchased prior to the accounting period in which the items' actual expense is incurred

Financial statements (aka hotels 'financials')

Financial summaries of hotel's accounting information

Accounts receivable (AR)

Money owed to the hotel because of sales made on credit

Allowances and adjustments

Reductions in sales revenue credited to guests because of errors in properly recording sales or to satisfy a guest who has experienced property shortcomings

Generally Accepted Accounting Principles (GAAP)

Techniques, methods, and procedures utilized by all accountants in the preparation of financial statements

Solvency

The ability of a hotel to pay its bills as they become due

Fixed charges

The expenses incurred in the purchase and occupation of the hotel (include rent, property taxes, insurance, interest, and depreciation and amortization)

Manager on Duty (MOD)

The individual on the hotel property responsible for making any managerial decisions required during the period he or she is MOD

Controller

The individual responsible, classifying, and summarizing a hotel's business transactions (aka comptroller)

Coding

The process of assigning incurred costs to predetermined cost centers or categories

Capital expenditures

The purchase of equipment, land, buildings, or other assets necessary for the operation of a hotel

Accounts payable (AP)

The sum total of all invoices owed by the hotel to its vendors for credit purchases made by the hotel

Shift bank

The total amount of currency and coins in a cashier's drawer at the beginning of that cashier's work shift

Sign-off

To verify or approve accuracy of operational information