Section 1 Accounting system Accounting for Hotels assistant lecture alya elfedawy

Accounting for hotels The hotels and catering industry is a substantial one. Hotel industry is a major source of earning foreign exchange. Types of hotels: (1) Transient Hotels. (2) Residential Hotels. (3) Motor Hotels (Motels). (4) Resort Hotels.

The main features of Hotels (1) The main characteristics: (1) Human resources. (2) Physical resources. (3) Services activities. (4) Seasonal activity.

Accounting System and financial statements in Hotels (1) Vouchers: (a) Statistical Vouchers. (b) Accounting Vouchers. (2)Accounting Records: (a) Balance sheet. (b) Income statement

Accounting System and financial statements in Hotels To determine the profit or loss of the hotel, we should follow the following procedures: (1) Dividing the hotel into groups of activities, and each activity should has its own revenues and expenses account. (2) Classifying the various expenses into: (a) Direct expenses related to each activity. (b) Indirect expenses (common) that can be easily allocated between activities. (c) Indirect expenses(common) that can not be easily allocated between activities. Then they assign on the P/L account.

Accounting System and financial statements in Hotels (3) Determining the revenues of each activity. (4) Performing P/L account for the hotel.

Accounting for Various Activities (1) Accounting in Rooms activity There are two departments for this activity: (1) Reception (2) Room services.

Accounting for Various Activities (1) Accounting in Rooms activity (1) Reception The main vouchers and recording: (1) Rooms data board: a wall board that contain the keys and any information about the various rooms. (2) Arriving Card: the card that should be filled by the customer when arriving. (3) Reserving record: Recording the names of customer who want to reserve in the hotel. (4) Recording card: The original card kept in the reception department, while many copies have been sent to the various departments.

Accounting for Various Activities (1) Accounting in Rooms activity (2) Room services The main vouchers and recording: (1) Guests record. (2) Receipts. (3) Guest bill. (4) Daily guests record.

Income Statement (1) Rooms Revenues: Transit. Permanent. Additional (Halls and conferences). (2) Expenses: Salaries. Rooms cleaning. Commission of the travel agent. Telecommunication. Laundry

Income Statement Reservation fees. Employees clothes.

(2) Accounting in Restaurant activity Income Statement (1) Revenues: Food and beverage. (2) Cost of sales: Food expenses beverage expenses. Direct expenses Indirect expenses.

(2) Accounting in Restaurant activity The different activities: (1) Purchasing and storage. This activity deal with providing the economic quantity of purchase and storage the quantity. (2) Cooking activity. Preparing the food for all departments.

Example Following are the date of ABC hotel: (1) The revenues: Permanent guest 1850000$. Halls and conferences rooms 1150000$. Food 1000000$ Beverage 600000$. (2) The expenses: Salaries: For rooms activity, 25000$ For food and beverage activity, 10000$.

Example Telecommunication 50000$ Food expenses 125000$. Preparing the food for all departments 200000$. Rooms cleaning 50000$. Commission of the travel agent 25000$. Reservation fees 60000$. Beverage expenses 40000$ Laundry 20000$ The cost of purchasing the food 30000$. Indirect costs between the two activities 300000$ (1:2). Common costs 200000$.

Example Required: (1) Preparing the income statement of Rooms activity. (2) Preparing the income statement of Food and beverage activity. Preparing the income statement of ABC hotel.

Solution Room Food and beverage hotel Revenue 3000000 1600000 4600000 (-) Expenses Salaries 25000 10000 35000 Telecommunication 50000 ------ 50000 Food & beverage ex ----- 125000 165000 Preparing the food ------ 200000 200000 Commission 25000 ------- 25000 Reservation fees 60000 ------- 60000 Laundry 20000 ------ 20000 Purchasing food ------- 30000 30000 Indirect cost 100000 200000 300000 Common cost ----- ------- 200000 Net Income 2720000 995000 3515000