Expenditures of a Hotel

1. Purchase of provisions, stores and wine.

2. Kitchen and bar expenses.

3. Remunerations to staff (or employee remuneration and welfare expense)

4. Electricity, fuel and water.

4. Entertainment expenses.

5. Advertisement and publicity expenses.

6. Repairs, renewals and replacements.

7. Administrative and general expenses.

8. Room occupying expenses, etc.

Departments of a Hotel

Departments of a Hotel

All departments of a hotel may be classified into two-revenue departments and non-revenue departments.

Revenue Earning Departments Revenue earning departments are operational departments that sell services or products to guests. A hotel has two major revenue earning departments. They are: (i) Accommodations, and (ii) food and beverage.

Accommodations

Accommodation department is responsible for the sale of rooms.. These departments are responsible for maintaining and selling the rooms in a hotel. In most hotels, these are the departments that directly or indirectly generate more revenue than any other department. This is because the sale of rooms constitutes a minimum of 50 per cent of the total revenue of a hotel. The various departments that support the room divisions department are:

Front office department: It is an operational department. It is the office when the guest is received, provided information, his luggage is handled, his accounts are settled on departure, and his complaints, problems and suggestions are looked after. It is responsible for welcoming and registering guests, allotting those rooms, and helping guests checking out.

Housekeeping department: This department is responsible for the cleanliness, maintenance and the aesthetic standard of the hotel. Housekeeping includes the servicing of guest rooms. This includes cleaning bedrooms, staircases, public areas and floral arrangements, first aid to guests etc.

Maintenance department:This department is responsible for all kinds of maintenance, repair and engineering work on equipment, machines, fixtures and fittings. It undertakes the supply of airconditioning, lighting, mechanical, electrical, carpentry and civil works of the hotel. Maintenance department is also known as engineering department.

Laundry: This is a critical department that launders the large volume of bed lines, restaurant lines, staff uniforms and guest garments. Large hotels may have an in-house laundry to control the movement of linen and uniform which are considered to be the precious assets of the hotel. Smaller hotels may outsource this activity to local laundries. The laundry is headed by laundry manager.

Food and Beverage (F & B) Department: The food and beverage department is another major revenue producing department. It is the key to the success of a hotel. The F & B department includes the restaurants, bars, coffee shops, banquets, room service, kitchen and bakery.. The various departments that come under the F & B may be discussed below in brief. :

Restaurant

A restaurant is a commercial establishment committed to the sale of food and beverage. A restaurant may be a licensed part of a hotel operation, whereby the sales of the restaurant contributes to the sales performance of the hotel, or a franchised operation, when the hotel leases space. In this case the hotel has no share in the profits of the restaurant operations. Restaurants are equipped with tables, chairs, crockery, cutlery, linen and decor. In addition to the basic purpose, restaurants may provide other facilities such as bar, entertainment, children party facilities, home delivery services, take-away services, outdoor catering etc.

Room Service: Room service is a food service operation. It provides food and beverage to guests staying in the hotel rooms. The room service is located in the kitchen and has an order-taker’s desk. Guests may order their food and beverage directly from their rooms to the room service order-taker who will pass on the order to the service team. The service team co-ordinates with the kitchen or bar for the preparation of the item.

Bars : The bar dispenses wines, liquor, spirits, juices, cigars and cigarettes. Restaurant food service professionals will co-ordinate with the bar for a guest’s beverage orders.

Banquets : The banquets department is a major revenue area within food and beverage department. It is headed by a banquet manager. He organizes and looks after large parties like dinners for hundreds of guests, conventions, marriage receptions and other functions.

Kitchens :A kitchen is the place where food is prepared. Large hotels have independent sections to deal with various aspects of food preparation due to the large volume of activity. Kitchen personnel co-ordinate closely with restaurants, room service, bars and banquets for the supply of food orders. Chef-de-cuisine is the head of the kitchen. He is responsible for planning, organizing and controlling the kitchen operations.

Kitchen stewarding :This department is primarily concerned with the storage, maintenance, cleanliness, and issue of cutlery, crockery, hollowware, chinaware and glassware to the restaurants and kitchens. It is responsible for the cleanliness of kitchens and the washing of pots and pans.

Minor Revenue Earning Departments

There are certain departments which earn smaller revenue. Such departments are as follows:

  Health club and recreation : People are getting increasingly health and physical fitness conscious. Hence some hotels maintain gymnasiums for men and women and swimming pool. Similarly, some hotels provide tennis courts, squash courts, and many other recreation facilities.

  Delicatessen : This department sells in-house butchery products.

  Patisseries.  : It sells bakery products.

  Beauty Salon : This provides hair dressing service and beauty care.

  Flower Shop : This is the retail outlet of the flowers and ferns from the gardens of the hotel.

  Health food counter : This is usually found at the health club. The counter provides health foods and diet foods that support a health regimen created by a dietician.

ACCOUNTING FOR HOTELS

Meaning and Definition of Hotels

A hotel simply refers to an establishment that provides rooms and meals. A hotel may be defined as a place that offers accommodation, food, and beverages at a cost that enables it to make a profit. Hotels provide accommodation, meals and refreshments, for irregular periods of time for those who may reserve their accommodation either in advance or on the premises. In broad terms, hotels provide facilities to meet the needs of the modern traveler. In short, hotel is an establishment that provides lodging usually on a short term basis. Today hotels provide much more than just accommodation and meals. It often provides a number of services such as restaurant, swimming pool, or child care; some hotels have conference and meeting rooms. Services are provided to guests based on their needs. Now the hotel industry is referred to as ‘hospitality industry’.

Features of Hotel Business
 The chief features of hotel business are as follows:

1. Hotels provide accommodation and food items to guests.

2. Some hotels maintain bars. They offer drinks to customers.

3. Some hotels may have on their premises a beauty parlor, a hair dressing saloon, a jewelers shop, a book stall, a newspaper stand etc.

4. There are some hotels that provide various professional and technical services.

5. Most hotels provide credit facility to customers. No guest is required to pay room rent in advance or to pay for the other services and facilities at the time when the services are rendered to him. Sometimes an advance is required to be paid. At the time of departure the balance is paid

6. In hotels, there are large numbers of stereo type transactions.

FA Question paper 33 % Units

IInd Semester B.Com Degree Examination, 17^th March 2012

BC2B02 – Financial Accounting

Time: Three Hours                                                                                    Maximum: 30 Weightage

I - Answer All Twelve Questions

A - Fill in the Blanks:

1)     Input >…………. > outputs > ……………

2)     AS 3- Deals …………………

3)     Sales Journal records all ………………… sales of Goods

4)     Preliminary expenses are an example of ………………

B - Write the Correct Answer from the Choice Given in the Brackets:

5)     Payment made to creditors is a (capital receipt, capital expenditure, revenue exp, revenue receipt)

6)     Income received in advance is (an income, a liability, an asset, a loss)

7)     Goods is given as samples should be credited to (advertisement account, sales account, purchase account, none of the above)

8)     Payment of LIC premium of owner is debited to ( capital account, drawings account, LIC premium account, None of these)

C - Answer in One Word:

9)     Trial balance is prepared to.

10)Credit note means.

11)Final accounts include.

12)The amount of money owned by a business to outsiders is known as.

 (12 × ¼ = 3 Weightage)

II – Short Answer Type Questions (Answer All Nine Questions)

13)Define financial accounting.

14)What do you mean by capital expenditure?

15)What are closing Entries?

16)Name the different types of cash book.

17)Define ledger.

18)What is trade discount?

19)What is business entity concept?

20)Define Balance Sheet.

21)Give the adjusting entry for prepaid expenses.

                                          (9 × 1 = 9 Weightage)

III – Short Essay / Paragraph Questions (Answer Any Five Questions)

22) Journalise the following Opening Entry:

Cash in hand 2,000

Plant 50,000

Furniture 5,000

Creditors 13,000

Debtors 18,000

23)Journalise the following Transactions

Jan. 1 Arun commenced business with cash 50,000

2 Purchased goods for cash 10,000

5 Purchased goods from Mohan on credit 6,000

7 Paid into Bank 5,000

10 Purchased furniture 2,000

20 Sold goods to Suresh on credit 5,000

25 Cash sales 3,500

26 Paid to Mohan on account 3,000

31 Paid salaries 2,800

24)From the following particulars prepare the sales book of Modern Furniture Mart

2003 June 5 Sold on credit to Arvind & Co.

20 tables @ Rs.600 per table

20 chairs @ Rs.300 per chair

7 Cash sales to Anand & Co.,

10 tables @ Rs.300 per table

20 chairs @ Rs.150 per chair

10 Sold to Baskar & Co., on credit

10 almirahs @ Rs.3,000 per almirah

10 tables @ Rs.200 per table

15 Sold old typewriter for Rs.1,000 to Madan on credit

20. Sold to Gopinath on credit.

10   ables @ Rs.1,000 per table

25) Show the Effect of Transactions on Accounting Equation :

1. A started business with cash Rs. 350000

2. Brought a car for Rs. 210000

3. Purchased goods from ABC traders, Rs. 20000

4. Cash sales Rs. 3000

5. Sold goods on credit to Mohan Rs.25000

6. Paid for office stationary Rs. 250

26)Prepare a Double Column Cash Book from the following transactions of Mr.Gopalan:

2004 Jan. 1 Cash in hand 4,000

6 Cash Purchases 2,000

10 Wages paid 40

11 Cash Sales 6,000

12 Cash received from Suresh and 1,980 allowed him discount 20

19 Cash paid to Meena 2,470 and discount received 30

27 Cash paid to Radha 400

28 Purchased goods for cash 2,070

27)Distinguish between capital expenditure and revenue expenditure.

28)The following balances were extracted from the ledger of Rahul on 31st March, 2003. You are requested to prepare a trial balance as on that date in the proper form.

Salaries 36,320                      Purchases 1,44,670

Sales 1,73,500                       Sundry Debtors 1,430

Plant & Machinery 34,300   Travelling Expenses 2,630

Commission Paid 1,880        Carriage Inward 240

Stock on 1.4.2002: 11,100   Sundry Creditors 14,260

Repairs 1670                                     Capital, 1.4.2002 62,500

Sundry Expenses 460           Drawings 3,500

Returns Inward 1,000          Cash at Bank 1,090

Discount Allowed 1,150       Returns Outward 400

Rent and Rates 3,220           Investments 6,000

                                                      (5 × 2 = 10 Weightage)

IV – Essay Questions (Answer Any Two Questions)

29)The trial balances of Mr.Uma Shankar shows the following balances on 31st March 2000. Prepare final accounts.

Debit Balance Rs.                                            Credit Balance Rs.

Purchases                  70,000                        Capital account          56,000

Sales returns                            5,000                       Sales                          1,50,000

Opening stock            20,000                        Purchase returns         4,000

Discount allowed          2,000                       Discount received        1,000

Bank charges                               500                       Sundry creditors        30,000

Salaries                         4,500

Wages                           5,000

Freight inwards           4,000

Freight outwards        1,000

Rent, rates and taxes   5,000

Advertising                  6,000

Cash in hand                1,000

Plant and machinery 50,000

Sundry debtors         60,000

Cash at bank                 7,000                                                                                  

           2,41,000                                                          2,41,000

Additional information:-

Closing stock on 31st March 2000 was Rs. 30,000.

Depreciation on plant and machinery 6%

Provide 5% for bad and doubtful debts

Prepaid rent 200

Interest on capital to be allowed at 8% pa

30) Journalise the following transactions and post them into ledger and prepare trial balance.

 Apr 1^st , 2010.    commenced business with cash Rs.600000.

2    Opened a state bank of India account with Rs 50000.

3    Purchase land and building Rs. 200000

5        Bought goods from Anil  Rs.45000

6        Sold goods to Arun Rs.18000

11   Drew cheque for Rs.4300 for petty cash.

15   Paid to Anil on account Rs.40000

16   Received cheque from Arun Rs.14900;Discount allowed to him Rs.100

17   Paid salary Rs.8000

18   Bought goods for cash Rs.16500

19   Bought Loose tools Rs.4700

20   Sold goods for cash Rs.12000

21   Paid electricity charges Rs.900

22   Bought goods from Manohar Rs.50000

25   Goods returned to him Rs.500

26   Cheque sent to Manohar in full settlement of his account.

27   Paid carriages Rs.230

31)Explain the Accounting Process with the help of an Accounting cycle.

                                   (2 × 4 = 8 Weightage)

Question Paper FA

IInd Semester B.Com Degree Examination, 1^st February 2012

BC2B02 – Financial Accounting

Time: Three Hours                                                                                    Maximum: 20 Weightage

I - Answer All Twelve Questions

A - Fill in the Blanks:

1)     Transaction = ……………  +  ……………

2)     Where ………… ends …………… begins

3)     Debit the receiver and credit the giver is the rule for ………………

4)     Cash purchases are entered in the …………

B - Write the Correct Answer from the Choice Given in the Brackets:

5)     Sale of old asset will be recorded in (purchase book, sales book, journal proper, nowhere)

6)     Contra entries are related to (cash, bank, cash and bank, none of these)

7)     The amount of salary paid to ram should be debited to (ram’s account ,cash account, salary account)

8)     Classification of accounts is made in ( journal, ledger, subsidiary books, balance sheet)

C - Answer in One Word:

9)     Hybrid system of accounting  means.

10)Excess of revenue over expense is known as.

11)Ledger folio used to.

12)Analytical petty cash books are using for.

 (12 × ¼ = 3 Weightage)

II – Short Answer Type Questions (Answer Any 5 Questions)

13)Define accounting?

14)What is double entry system?

15)Write the accounting rules?

16)Define accounting cycle?

17)What is petty cash book?

18)Define trial balance?

                                          (5 × 1 = 5 Weightage)

III – Short Essay / Paragraph Questions (Answer Any 4 Questions)

19)Explain the various accounting concepts

20)What are the objectives and functions of accounting

21)Show the Effect of Transactions on Accounting Equation :

1. Ram started business with cash Rs. 250000

2. Brought furniture for Rs. 21000

3. Purchased goods from KP traders, Rs. 28500

4. Cash sales Rs. 35000

5. Sold goods on credit to Manoharan Rs.25000

6. Paid for office stationary Rs. 250

      22)Prepare a columnar petty cash book and post them into ledger

Jan. 1  Balance in hand Rs. 50

         5  Received from the cashier Rs. 500

        6  Travelling expenses Rs. 45

        7  Postage Rs. 23

        20  Stationery Rs. 30

        22  Wages to coolie 150

        27  Cartage Rs. 15

        30  Tea Rs. 20

22)How do you classify ledger?

                                                      (4 × 2 = 8 Weightage)

IV – Essay Questions (Answer Any 1 Questions)

23)Enter the following transactions in cash book with tree columns and balance the cash book.

Dec.   1   cash balance Rs. 8,000;Balance with bank Rs.20,000

           2   Paid in to bank Rs.4,000

           4   Received cash from Sunder Rs.2,000 and allowed him discount Rs.60

           5   Cash sales Rs.550

           6  Sold  goods for Rs. 450 and received cheque.

           9   Paid to Dasan by cheque of Rs.640 in full settlement of his account paid for     

               Rs.700

12   Cash purchace for Rs. 1290, paid a cheque.

13   Paid by cheque to Rinu Rs.1,450 in full settlement of his account Rs.1,600

18   Withdrow for office use Rs.1,800

19   Withdrow for personel use Rs.200

20   Advertaisement expence Rs. 90

23   Cash withdrow from bank Rs.1000 for personel use.

24   Paid salaries Rs. 2500 by cheque

25   Life insurance premium paid Rs.600

26   Paid rent Rs. 800

27   Office furniture purchaced worth Rs. 750

28   Received a cheque of Rs. 1160 frome Revathi in full settlement of his account for Rs. 1240

                               [Hint: Life insurance premium should be treated as drawings]

24) March 09:  1^st     commenced business with cash Rs.50,000 and deposited an amount of Rs. 1,00,000 with state bank of India.

5        Bought goods from Suneera  Rs.2000

6        Sold goods to Chandra Rs.1500

11   Drew cheque for Rs.5,000 for petty cash.

15   Paid suneera on account Rs.1,000

16   Received cheque from Chandra Rs.1400;Discount allowed to him Rs.100

17   Paid wages Rs.300

18   Bought goods for cash Rs.3,000

19   Bought almirah Rs.3,000

20   Sold goods for cash Rs.1,500

21   Paid electricity charges Rs.200

22   Bought goods from Manohar Rs.10,000

25   Goods returned to him Rs.200

26   Cheque sent to Manohar in full settlement of his account.

27   Paid carriges Rs.150

                                   (1 × 4 = 8 Weightage)