FINANCIAL MANAGEMENT

For Tourism, Hotel & Restaurant Management

DEFINITION OF ACCOUNTING

ROLE OF IN THE

USERS OF ACCOUNTING REPORTS

Management Investors/Owners Lender Supplier Employee Customer Government

OBJECTIVES OF FINANCIAL ACCOUNTING

QUALITATIVE CHARACTERISTICS OF FINANCIAL STATEMENTS

UNDERSTANDABILITY RELEVANCE RELIABILITY COMPARABILITY

ACCOUNTING PRINCIPLES
BUSINESS ENTITY CONCEPT

EXCHANGE PRICE OR COST PRINCIPLE GOING CONCERN PRINCIPLE

OBJECTIVITY PRINCIPLE

BASIC ACCOUNTING REVIEW

BALANCE SHEET

VENETIAN HOTEL, INC.

ASSETS

LIABILITIES

OWNERS EQUITY

INCOME

_
EXPENSE

Rules of Debit and Credit

RULES OF DEBIT AND CREDIT

DEBIT

1 Debit is the left side of the account 2 In an asset account, debit signifies increase 3 In an expense account, debit signifies increase 4 In a drawing account, debit signifies increase 5 In a liability account, debit signifies decrease 6 In an owner's equipty account, debit signifies decrease 7 In an income account, debit signifies decrease

RULES OF DEBIT AND CREDIT

CREDIT

1 Credit is the right side of the account 2 In an asset accoutn, credit signifies decrease 3 In an expense account, credit signifies decrease 4 In a drawing account, credit signifies decrease 5 In a liability account, credit signifies increase 6 In an owner's equity account, credit signifies increase 7 In an income account, credit signifies increase

THE ACCOUNTING CYCLE

Analyze and Journalize the transactions Post to the ledger accounts Prepare a trial balance Prepare the worksheet Journalize and post the adjusting entries Prepare the financial statements Journalize and post the closing entries Prepare a post-closing trial balance Reversing entries

CASH ACCOUNTING VS ACCRUAL ACCOUNTING

FORMS OF BUSINESS ORGANIZATION

-According to Ownership

-According to Nature

THE BALANCE SHEET

PURPOSES LIMITATION FORMATS CONTENTS

ILLUSTRATIVE BALANCE SHEET STATEMENT

VENETIAN HOTEL, INC. BALANCE SHEETS AT DECEMBER 31, 2007 AND 2006 (in thousands) 2007 ASSETS Current Assets Cash Marketable securities Accounts receivable, less allowance for doubtful accounts of P448 in 2007 and P417 in 2006 Inventories Operating and cleaning supplies Prepaid expenses Total current assets Property, Plant and Equipment Land Buildings and leasehold improvements Equipment Total Less: Accumulated depreciation and amortization Net China, Gassware, Silver Total property, plant and equipment Other Assets Total Assets

2006

4061 P 5272 7960 7041 1000 512 25846 20811 38273 11523 70607 11528 59079 10000 69079 373 95298 P

2382 8004 7000 6769 1350 759 26264 20811 13928 12768 47507 7530 39977 9000 48977 668 75909

ILLUSTRATIVE BALANCE SHEET STATEMENT

2007 LIABILTIES AND STOCKHOLERS' EQUITY Current Liabilities Accounts payable Accrued liabilities Notes payable - banks (current) Current maturities of long-term debt Total current liabilities Deferred Income Taxes Long-term Debt Total liabilities Stockholders' Equity Common stock, par value P1, authorized 10,000 shares; issued, 4,803,000 shares in 2007 and 4,594,000 shares in 2006 Additional paid-in capital Retained earnings Total stockholders' equipty Ttoal Liabilities and Stockholders' Equity 2006

14294 5669 5614 1884 27461 843 21059 49363 P

7591 5313 6012 1516 20432 635 16975 38042

4803 957 40175 45935 95298 P

4594 910 32363 37867 75909

CURRENT ASSETS
Cash Cash on Hand Petty Cash Fund
Cash in Bank
Cash Equivalents Marketable

Interest

Securities Credit Card Receivables Accounts Receivable-Trade Notes ReceivableTrade

Receivable Rent Receivable Dividends Receivable Inventories Supplies Inventory Prepaid Expenses

NON-CURRENT ASSETS

Land Building Equipment Car or Transportation Vehicle

or Delivery Van Furniture and Fixtures Intangible Asset Accumulated Depreciation China, Glassware, Silver, Linen, and Uniforms

OTHER ASSETS
Intangible Assets

Goodwill Patents Trademarks Copyrights Franchises Deposits Long-term Investments Leasehold Costs or Leasehold Improvements Deferred Expenses

CURRENT LIABILITIES
Accounts Payable Notes Payable

Current Maturities of Long-term

Debt Accrued Liabilities Income Tax Payable Deposits and Credit Balances Deferred Income Taxes Dividends Payable

NON-CURRENT LIABILITIES
LONG-TERM DEBT MORTGAGE PAYABLE OTHER LIABILITIES

Pension and Lease Obligation

STOCKHOLDERS EQUITY
Common Stock

Additional Paid-in Capital

Preferred Stock Treasury Stock Retained Earnings