Accounting Essentials for Hospitality Managers  book cover
4th Edition

Accounting Essentials for Hospitality Managers

ISBN 9781032024325
Published February 28, 2022 by Routledge
402 Pages 22 B/W Illustrations

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Book Description

For non-accountant hospitality managers, accounting and financial management is often perceived as an inaccessible part of the business. Yet having a grasp of accounting basics is a key part of management. Using an easy-to-read style, this book provides a comprehensive overview of the most relevant accounting techniques and information for hospitality managers. It demonstrates how to organise and analyse accounting data to help make informed decisions with confidence.

With its highly practical approach, this new fourth edition:

  • Quickly develops the reader’s ability to adeptly use and interpret accounting information to enhance organisational decision-making and control.
  • Demonstrates how an appropriate analysis of financial reports can drive your business strategy forward from a well-informed base.
  • Presents new accounting problems in the context of a range of countries and currencies throughout.
  • Develops mastery of the key accounting concepts through financial decision-making cases that take a hospitality manager’s perspective on a range of issues.
  • Includes accounting problems at the end of each chapter to be used to test knowledge and apply understanding to real-life situations.
  • Offers extensive web support for instructors and students that includes PowerPoint slides, solutions to end-of-chapter problems, a test bank and additional exercises.

The book is written in an accessible and engaging style and structured logically with useful features throughout to aid students’ learning and understanding. It is a key resource for all future hospitality managers.

Table of Contents

1. Introduction: Hospitality Decision Makers’ Use of Accounting

Key characteristics of the hospitality industry

Accounting and business management

Accounting and Hospitality Decision Makers

Uniform System of Accounts

Organizational forms

2. Analysing Transactions and Preparing Year-end Financial Statements

The Balance Sheet and Income Statement

Classifying transactions according to assets, liabilities and owners’ equity

The importance of understanding financial accounting basics

3. Double Entry Accounting

Double entry accounting: some background concepts

Double entry accounting: a worked example

Journal entries

4. Adjusting and Closing Entries

Why do we need closing entries?

Why do we need adjusting entries?

Worked examples highlighting types of adjusting entry

5. Financial Statement Analysis

Profit performance

Financial stability

Ratios using operational measures

6. Internal Control

Internal Control Principles

Internal control procedures and specific hotel activities

Bank reconciliation: an important internal control procedure

Accounting for petty cash

7. Cost Management Issues

Management’s need for cost information

Major cost classification schemes

Qualitative and behavioural factors in management decisions

8. Cost-Volume-Profit Analysis

Contribution margin

Breakeven analysis

The assumptions of cost-volume-profit analysis

9. Budgeting and Responsibility Accounting

Responsibility accounting

Issues of cost, revenue, profit and investment centre design

Roles of the budget

Behavioural aspects of budgeting

Technical aspects of budget preparation

10. Flexible Budgeting and Variance Analysis

Flexible budgeting

Variance analysis


11. Performance Measurement

Shortcomings of conventional financial performance measures

Key Issues in Performance Measurement System Design

The Balanced Scorecard

12. Cost Information and Pricing

Factors affecting pricing

Traditionally applied pricing methods

13. Working Capital Management

Cash management

Accounts receivable management

Inventory management

Accounts payable management

Working Capital Management

14. Investment Decision Making

Accounting rate of return


Net Present Value (NPV)

Internal Rate of Return

Integrating the four investment appraisal techniques

15. Other Managerial Finance Issues

What should be the over-riding business objective in financial management?

Agency Issues

Trading shares in publicly listed companies

Share Valuation


Operating and Financial Leverage

16. Revenue Management

Business characteristics conducive to revenue management application

Demand forecasting

Gauging a hotel’s need for revenue management

Revenue Management System requirements

Using rate categories and demand forecasts

Length of stay controls

Managing group bookings

Revenue management implementation issues

Words of caution in applying the revenue management philosophy

Solutions to the First Three Problems of Each Chapter

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Chris Guilding has more than 30 years’ experience in academia. For 12 years, he was Professor of Hotel Management in the Department of Tourism, Sport and Hotel Management at Griffith University, Australia. His teaching specialism is in management accounting, and he has taught MBA, Masters in Hospitality Management, Professional Golfers Association and Australian Institute of Company Directors courses as well as undergraduate programmes. In addition to Australia, he has taught in Canada, Holland, Hong Kong, New Zealand, Singapore and the United Kingdom.

Kate Mingjie Ji is currently a senior lecturer in finance and revenue management at Oxford Brookes Business School, UK. She started her career as an auditor with PricewaterhouseCoopers. She has taught undergraduate and postgraduate finance and accounting courses at Macau University of Science and Technology and also the School of Hotel and Tourism Management at Hong Kong Polytechnic University. She is highly regarded by her students for her passionate approach to teaching.