Hotel Accounting
Final Test Solutions
Course Introduction
Hotel Accounting provides an overview of fundamental accounting principles and practices as they apply specifically to the hospitality industry. The course covers key topics such as financial statement preparation and analysis, revenue management, budgeting, cost control, internal controls, and auditing procedures unique to hotel operations. Students will learn how to apply accounting techniques to monitor and improve the financial performance of hotels, handle guest accounts, manage departmental revenues, and comply with industry regulations. Emphasis is placed on real-world scenarios, allowing students to develop practical skills essential for accounting and financial decision-making in hotel management.
Recommended Textbook
Hospitality Financial Management 1st Edition by Robert E. Chatfield
Available Study Resources on Quizplus
12 Chapters 393 Verified Questions
393 Flashcards
Source URL: https://quizplus.com/study-set/3806
2
Chapter 1: Introduction
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/75991
Sample Questions
Q1) The best example of an agency problem is
A)an argument between two managers about a late check-out.
B)lenders disagreeing with hotel owners about dividend payments.
C)two employees disagreeing about proper table service.
D)the maintenance manager arguing with the housekeeping manager about an out-of-order room.
Answer: B
Q2) The goal of hospitality financial management is to maximize the wealth of the owners.
A)True
B)False
Answer: True
Q3) Value is created if a project's
A)incremental costs exceed incremental benefits.
B)incremental costs equal incremental benefits.
C)incremental benefits exceed incremental costs.
D)none of the above.
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Financial Markets and Financial Instruments
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/75990
Sample Questions
Q1) If a $1,000 bond is selling for 97, what is the selling price in dollars?
A)$970
B)$97
C)$1,030
D)$1,070
Answer: A
Q2) You manage a McDonald's in Germany. At the beginning of the year, the exchange rate was $1 = 1Euro. At the end of the year, the exchange rate is $1 = .90Euro. You report profits of 450,000 Euros. How much have your profits increased in terms of dollars from the exchange rate change during the year?
A)10%
B)90%
C)11.11%
D)unkown from information given
Answer: C
Q3) More shares are traded on the Nasdaq on a daily basis than the NYSE.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Review of Financial Statements and Selected Ratios
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/75989
Sample Questions
Q1) The number of times interest earned is a
A)liquidity ratio.
B)turnover ratio.
C)profitability ratio.
D)solvency ratio.
Answer: D
Q2) Which of the following is an example of an "other" asset?
A)prepaid insurance
B)deferred income taxes
C)treasury stock
D)patents
Answer: D
Q3) The uniform system of accounts helps managers organize the statement of cash flows.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: The Relationship Between Risk and Return
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/75988
Sample Questions
Q1) A share of stock has an expected return of 12 percent and a standard deviation of 24 percent. Therefore, its coefficient of variation is
A).50.
B)2.0.
C)1.0.
D).12.
Q2) The best definition of "risk" is
A)taking a chance.
B)not being able to understand all the outcomes.
C)uncertainty about an outcome.
D)how large the outcome is.
Q3) If two assets are perfectly positively correlated, we can put them together into a portfolio and completely eliminate risk.
A)True
B)False
Q4) Even the desire for money exhibits a declining marginal utility.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Time Value of Money
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75987
Sample Questions
Q1) The interest paid on an amortized loan decreases with each payment.
A)True
B)False
Q2) A loan amortization schedule shows how much of the principal balance is paid off with each loan payment.
A)True
B)False
Q3) Hyun just turned 25 today. By her 60<sup>th</sup> birthday she would like to have $1,000,000 saved. She plans to invest equal annual payments beginning with her 26<sup>th</sup> birthday and ending on her 60<sup>th</sup> birthday. If all invested funds earn 8% annually, how much does she need to invest each year to have exactly $1,000,000 by her 60<sup>th</sup> birthday?
A)$28,571.43
B)$6,304.11
C)$5,803.26
D)$5,344.67
Q4) An infinite annuity is called a perpetuity.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Fixed Income Securities: Bonds and Preferred Stock
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75986
Sample Questions
Q1) If a bond is not secured by collateral, it is called a debenture.
A)True
B)False
Q2) The Gizaw Corporation has a bond outstanding that matures in the year 2018. But the corporation can pay the bond back early at the corporation's option. What kind of feature is this option?
A)put feature
B)equity conversion feature
C)call feature
D)adjustable coupon rate feature
Q3) Which of the following is the credit contract governing the investor and issuing corporation of a bond?
A)debenture
B)indenture
C)collateral
D)sinking fund
Q4) Bonds and common stock are generally both classified as fixed income securities. A)True
B)False
8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Common Stock
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75985
Sample Questions
Q1) Why is valuing common stock more difficult than valuing bonds?
A)Common stock is a long-term security and a bond is a short-term security.
B)Because bonds have more seniority than common stocks.
C)Because common stock is less risky to the investor than a bond.
D)It is more difficult to forecast future common stock cash flows than bond cash flow.
Q2) Common stock provides the investor a residual claim on both the firm's assets and the firm's cash flow.
A)True
B)False
Q3) Keong is considering an investment in Leong's Bar & Grille Corporation. Keong is planning to buy the stock today, hold it for 2 years, and then expects to sell the stock for $30 at the end of 2 years. Keong expects the first dividend to be $1.00 and the second dividend to be $1.30. If Keong requires a 15% rate of return, what is the value of Leong's Bar & Grille common stock to Keong today?
A)$21.58
B)$23.55
C)$24.54
D)$23.67
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Cost of Capital
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75984
Sample Questions
Q1) Tokyo Food Supplies Corporation sold an issue of 12-year bonds. The bonds sold at $980 each. After issuance costs, Tokyo Food Supplies received $975 each. The maturity value is $1,000 each and the coupon rate is 9% and paid annually. What is the after-tax cost of debt for these bonds if Tokyo Food Supplies' marginal tax rate is 40%?
A)5.61%
B)9.36%
C)9.28%
D)5.57%
Q2) Shamas Famous Restaurants expects to pay a common stock dividend of $1.50 per share next year d<sub>1</sub>). Dividends are expected to grow at a 4% rate for the foreseeable future. Shamas' common stock is selling for $18.50 per share and issuance costs are $3.50 per share. What is Shamas cost of external equity?
A)20.59%
B)12.11%
C)14.00%
D)10.00%
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Introduction to Capital Budgeting and Cash Flow
Estimation
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75983
Sample Questions
Q1) The estimation of a project's net cash flows NCF)should not include changes in A)depreciation.
B)cash operating costs.
C)interest expense.
D)sales revenue.
Q2) Which one of the following is not part of a project's estimated net cash flows?
A)the expected loss in your firm's other businesses due to a new project
B)the cost of a customer survey performed one year before the project decision is made
C)the change in depreciation
D)the change in cash operating costs
Q3) What is net working capital?
A)current liabilities minus current assets
B)current assets minus net fixed assets
C)current assets minus current liabilities
D)net fixed assets minus long-term liabilities
Q4) A project's net cash flows are typically cash inflows whereas a project's net investment is typically a cash outflow.
A)True
B)False
11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Capital Budgeting Decision Methods
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/75982
Sample Questions
Q1) Which of the following is not true of the payback period method?
A)It fails to take into account the time value of money.
B)It fails to take into account a project's net cash flows.
C)It fails to take into account a project's net cash flows after the payback period.
D)There is no objective criterion for what is an acceptable payback period.
Q2) Which one of the following capital budgeting decision methods measures how long it takes for a project's benefits to recover the project's cost?
A)profitability index
B)payback period
C)modified internal rate of return
D)net present value
Q3) A project's net present value is the sum of the future values of the net cash flows compounded at the required rate of return minus the net investment.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: An Introduction to Hotel Valuation
Available Study Resources on Quizplus for this Chatper
46 Verified Questions
46 Flashcards
Source URL: https://quizplus.com/quiz/75981
Sample Questions
Q1) The terminal capitalization rate is
A)the same as an equity yield rate.
B)usually higher than the overall capitalization rate.
C)usually lower than the overall capitalization rate.
D)used to discount the NOI stream.
Q2) The highest and best use for a parcel of land is always a commercial use.
A)True
B)False
Q3) When completing the sales comparison approach, inferior properties are adjusted downward.
A)True
B)False
Q4) The cost approach is generally the easiest approach to complete.
A)True
B)False
Q5) The fair share concept states that if a hotel represents 10 percent of room supply, it should accommodate 10 percent of market demand.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Capital Structure
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/75980
Sample Questions
Q1) What is financial risk?
A)the risk arising from a firms over reliance on short-term sources of financing
B)the ordinary business risk arising from a firm's basic operations
C)the risk arising from a firm's use of variable cost sources of financing
D)the risk arising from a firm's use of fixed cost sources of financing
Q2) As a firm increases its use of debt financing, what is the impact upon the cost of equity?
A)The cost of equity decreases.
B)The cost of equity remains the same.
C)The cost of equity increases.
D)None of the above.
Q3) How does high business risk affect firm risk?
A)Higher business risk increases the volatility of capital structure.
B)Higher business risk increases the volatility of EBIT.
C)Higher business risk increases the volatility of financial costs.
D)Higher business risk increases the volatility of the firm's asset structure.
Q4) Bankruptcy costs are one type of financial distress cost.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14