National Certificate in Hospital Management PDF

BTEC Level 4 Higher National Certificate in Hospital Management
UNIT 4 THE HOSPITALITY BUSINESS TOOLKIT
|05 DECEMBER 2021 WORD COUNT: 2548
Managing Finance and
Recording Transactions
STUDENT’S NAME: TRAN LE HA MY
LECTURER’S NAME: MRS. HELEN DO

Table of Content
Introduction............................................................................................................................2
I. The principles of managing and monitoring financial performance:...........................................3
1. The definition of accounting and the contribution of accounting to the hospitality industry:3
2. Analysing the Accounting principles and its definition:..........................................................3
3. The basic Accounting Equation and the Financial Statement:................................................4
II. Applying the double entry book-keeping system of debits and credits to record sales and
purchases transactions in a general ledger:.....................................................................................6
1. Definition of double entry accounting and debit/credit rules:.................................................6
2. Double entry record option 1:..................................................................................................7
3. Producing a basic trial balance applying the use of the balance off rule to complete the
ledger:...............................................................................................................................................8
II. The trial balance with double entry bookkeeping.......................................................................9
III. Recording correctly transactions and an accurate trial balance by completing the balance off
ledger accounts with accepted accounting principles.....................................................................10
1. The income statement and profit and loss statement option 1 and option 2:........................10
2. Comparing the income statement option 1 and option 2 and recommending to the
organization:...................................................................................................................................11
Conclusion............................................................................................................................11
References............................................................................................................................12
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Introduction
Accounting plays a critical role in all the fields nowadays. Every company now have to
comprises a finance department with multiple related positions such as account payable,
purchasing, account receivable, general cashier... to maintain and control the statistics. By
gaining deeper insight into the financial situation for example the profit, the income and the loss
of the company, the owner can have a better understand of their company situation. Therefore,
based on the accurate statistics and the recommendations from finance department, the owner
boost their profit to the maximum and develop the company.
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I. The principles of managing and monitoring financial performance:
1. The definition of accounting and the contribution of accounting to the hospitality
industry:
1.1. Definition of accounting:
Due to Vietnam Accounting Law in 2003: Accounting is the collection, processing,
examination, analysis and provision of economic and financial information in the form of value,
product and timing. Accounting consists of three fundamental activities:
 Identification: Identify economic events (transactions)
 Recording: Record, classify and summarize
 Communication: Prepare accounting reports, analyze and interpret for users
The accounting process includes the bookkeeping function.
1.2. Both external and internal users take advantage of accounting data:
External users are taxing authorities, labor unions, customers, authorities, investors,
creditors... those are outside the organization who use the financial information to make
decisions or to evaluate an entity’s performance.
Internal users are finance department, human resources department, management,
marketing department...those are within a business organization who utilize financial
information to support their decisions in organizing and running the business.
Accounting plays a vital role in running a business because it helps you track income and
expenditures, ensure statutory compliance, and provide investors, management, and government
with quantitative financial information which can be used in making business decisions.
2. Analysing the Accounting principles and its definition:
2.1. Definition of accounting principles:
Accounting principles are the rules that accountants must follow when preparing
financial statements for a publicly traded organization. The principles have been developed and
modified through common usage by accountants all over the world. They are also what the
complete set of accounting standards were built upon, which are the standards issued by the
Financial Accounting Standards Board and the International Accounting Standards Board.
1) Business Entity principle: An organization created by an individual or individuals to
conduct business, engage in a trade or partake in similar activities. There are various types of
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