Course Code: HM 301A

Course Title: Accountancy for Hospitality

Course Leader: Sushma B S

Sushma.hm.hc@msruas.ac.in

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Lecture No. 1
Introduction to Accounts
At the end of this lecture, the student will be able to:

Explain Meaning of Accounting,

Explain the objectives of Accounting
Describe the Accounting systems
Explain the role of hotel accounting

Discuss the significance of hotel accounting

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Content
Definition of Accounting

Meaning of Accounting

Role of hotel accounting

Objectives of Accounting

Accounting systems

Significance of hotel accounting

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Definition of Accounting

According to American Institute of Certified Public Accountants(AICPA),

accounting is The art of recording classifying, and summarizing in a
significant manner in terms of money, transactions & events which are
in part , at least , of a financial character & interpreting the results
thereof.

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Definition of Accounting contd..

According to American Accounting Association(AAA) , accounting is,

The process of identifying, measuring and communicating
economic information to permit informed judgments and decisions
by users of the information.

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Meaning of Accounting

The systematic recording, reporting and analysis of

financial transactions of a business.

The person in charge of accounting is known as an accountant, and this

individual is typically required to follow a set of rules regulations, such
as the Generally accepted accounting principles

Accounting allows a company to analyze the financial performance of

the business, and look at statistic such as net profit.

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Role of Hotel Accounts
Hotel accounting is part of accounting practice in hospitality
industry.

"consolidated statements" are made for the hotel.

The main financial statements are no different from other accounting

reports:

(i) balance sheet,

(ii) profit and loss, and

(iii) statement of cash flow.

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Objectives of Accounting

The following are the objectives of accounting:

To make information available to various groups & users

Calculation of Profit or loss

Depiction of financial position

To maintain records of the business

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Accounting Systems
An accounting system is the system used to manage the
income, expenses, and other financial activities of a business

An accounting system allows a business to keep track of all types of

financial transactions, including purchases (expenses), sales (invoices
and income), liabilities (funding, accounts payable), etc. and is
capable of generating comprehensive statistical reports that provide
management or interested parties with a clear set of data to aid in
the decision-making process.

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Role of Accounting system

Accounting systems were a complex series of manual calculations

and balances
Expenses

Invoices

Funding

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Significance of Hotel Accounting

Hotel accounting is not about managing revenue and expenses hotel

franchises have unique financial needs that demand competent staff

Accounting system that will allow management to plan for the future
and improve services for both guests and staff alike.

When assessing the quality of accounting of a hotel property,

including staff training, accounting software and forecasting.

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Key responsibilities include

Producing an accurate set of month-end accounts

Comparing profit to previous periods and forecasts

Preparing budgets and business planning

Financial statement and balance sheet production

Cash flow statements

Payroll control

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Summary

Accounting allows a company to analyze the financial performance of

the business, and look at statistic such as net profit. The systematic

recording, reporting and analysis of financial transactions of a

business.

Hotel accounting is part of accounting practice in hospitality industry.

"consolidated statements" are made for the hotel.

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Summary contd..

An accounting system is the system used to manage the

income, expenses, and other financial activities of a business
Accounting system that will allow management to plan for the
future and improve services for both guests and staff alike.

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 References

Jain S.P & Narang K.L (1999), Hotel Accountancy & Finance- 1st
Edition, Kalyani Publishers
Grewal T.S. (2004), Double entry Book-keeping - 11th Revised
Edition -S. Chand & Sons - New Delhi
Chopde L.N., Choudhari D.H. (1999), Book Keeping&
Accountancy - 14th Edition - Sheth Publishers Pvt. Ltd.
Mumbai
Kotas Richard (1981), Accounting in the Hotel & Catering Industry
- 4th Edition - International Textbook Company
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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences
 Disclaimer

All data and content provided in this presentation are taken from the
reference books, internet websites and links, for informational
purposes only

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Faculty of Hospitality Management and Catering Technology Ramaiah University of Applied Sciences