Question

Discuss in the detail the Balance Sheet. What is shown on the Balance Sheet? Why is the Balance Sheet important to a hospitality firm?

(400 words required this sucject is hospitality accounting Please write clear your own thought or search the internet. Thank you!)

this is all the requestments

Answer 1

The balance sheet is a financial statement which gives information about Company's asset, liabilities and shareholder's equity at any point of time. Assets are something which company owns and has made payment for it. It also includes the cost which is paid in advance but has not incurred any cost for it till now. The example of assets is Cash, prepaid expenses like Prepaid salary, prepaid advertisement, Machinery, equipment, Goodwill, and Building etc. The classification of the asset on balance sheet are: 1) Current Asset 2) Investment 3) Property, plant and equipment 4) Intangible Asset 5) Other Asset 6) Total Asset. Liabilities are an obligation which company has to pay. Mostly payable word is associated with it. They are mostly the source of an asset which company has to buy for them. So, in a nutshell, we can say that Assets are the application of fund and Liabilities are the source of fund. In liabilities the things included in the balance sheet are: 1) Notes payable 2) Account Payable 3) Wages payable 4) Interest Payable 5) Bonds Payable 6) Lawsuits payable. The main classification of liabilities are 1) Long-term liabilities 2) Short-term liabilities. Owner's equity is the residual of asset minus liabilities. They are the main source of an asset of the company. They are generally 1) Common stock 2) Preferred stock 3) Retained earning. It is the snapshot of the company's financial status, net worth and value of the business.

In hospitality firm, it is mainly used by the managers to know the status of the company. It is mainly used to know which department of the hotel requires how many assets and what are the liabilities of the departments. it is also used to know the pricing of Food and Beverages in the firm. The balance sheet is required to know the exact order date of the inventory of the firm like food, mattress, kitchen utensils etc which helps us to serve the customer in a better manner and also customer satisfaction increases if we provide better service level to our customer. Through balance sheet manager gets an idea of whether an additional funding is required for the hotel or whether the current fund allocated is utilized properly with 100 % efficiency by the firm. Pricing of the packages of any hotel is decided on basis of the balance sheet and profit or loss account of the company. Any managerial decisions like whether to construct any new room or to hire any additional staff will depend on the balance sheet of the company.