Lesson 1

HA100 : The Class : Operations : Accounting : Lesson 1

Accounting and Finance

Finance – management of company’s monetary resources plus income.

Looks at – Past + Present + Future - to make sure the company is financially healthy.

Accounting – Tool used in financial management. Supplies information on how to manage and evaluate dollars.

Accounting – Looks at the past.

Accounting:

Industrial organizations are for profit – revenues must exceed expenses. Accounting is a process of measurement in monetary units – U.S. Dollars.

Revenues controlled by company

Claims against those resources

Flow of resources into the company

Flow of resources out of the company

The Accounting Model

Assets:

Buildings

Equipment

Cash

Land

Dollars due from clients

Interest from investments

Liability:

Loans

Dollars owed to suppliers/vendors

Wages payable

Assets – Liabilities = Owner’s Equity

Balance Sheet:

Condition of a company at a certain point in time.

Assets = Liability + Equity

Business activity is summarized in the Statement of Income

Revenue – Expenses = Net Income

$85,000 - $75,000 = $10,000

This $10,000 is added to Owner’s Equity at the end of the year.

Transactional Analysis

Transactions occur in business operations on daily basis impacting the profitability of the business.

Transaction Flow Chart:

Business Activity

Transactions

Recording

Data processed and analyzed

Reports prepared from accounting records

Managers/Investors

Interpretation and evaluation

Uniform System of Accounts for Hotels and Resorts

Flexible accounting system that could be used by all hotels

Facilitates comparison

Uniform System of Accounts for Restaurants

Financial Management

This department has a broad and important responsibility. The Vice President of Finance or Controller is responsible for the operation of this department.

VP of Finance – Responsibilities:

Budgeting and Forecasting.

The tool is the operating budget:

- to assist in planning

- a control mechanism

Cash Management – to secure cash flow.

Raising Capital/Funds

- Public Financing

- Banks

- Other Institutions

Tax Issues

Bank Relations

Risk management – Insurance

Internal Audit

- To prevent fraud

- To make sure that internal controls are adequate

Extra burdens for the VP of Finance:

Going Global

- Different tax laws

- Currency regulations

- Different accounting standards

The Environment

New Technology made the VP of Finance’s job easier.

Once you have finished you should:

Go onto Assignment 1
or
Go back to Hospitality Accounting & Finance

E-mail Lenka Hospodka
or call (928) 523-2845 (Lenka Hospodka)