Lea R. Dopson is Dean and James A. Collins Distinguished Chair of The Collins College of Hospitality Management at Cal Poly Pomona. Previously, she was Department Chair of Hospitality and Tourism Management at the University of North Texas, and she taught at Cal Poly Pomona, the University of Houston, and Texas Tech University. Dr. Dopson holds an Ed.D. from the University of Houston, and an MBA and BS in Restaurant, Hotel, and Institutional Management from Texas Tech University. Her areas of teaching include hos-pitality managerial accounting, hospitality finance, and food and beverage cost controls. She has published in a variety of journals and has presented her research at numerous conferences. She has also co-authored with David Hayes, Food and Beverage Cost Control, published by John Wiley & Sons, which is presently in its sixth edition. Dr. Dopson has an ardent interest in international education, as is demonstrated by her creation of a MS in International Sustainable Tourism joint degree between the University of North Texas and Centro Agronómico Tropical de Investigación y Enseñanza (CATIE), Costa Rica. Also, Dr. Dopson lived 9 months in Zimbabwe, Africa, developing a degree program in interna-tional hospitality and tourism. In addition to her academic career, she has held various unit and corporate hospitality management positions with Texas Tech Foodservice, Sheraton Hotels, and Bristol Hotels.David K. Hayes earned his Ph.D. in Education from Purdue University, as well as MS and BS degrees in Hotel and Restaurant Management. He held faculty positions at Purdue University, Texas Tech University, and the University of Houston. At Texas Tech University, he founded the Restaurant Hotel and Institutional Management (RHIM) program and served as Chair of the Department of Nutrition, Education and Restaurant/Hotel Management. Dr. Hayes was Vice President of the Educational Institute (E.I.) of the American Hotel & Lodging Association (AH&LA) and was responsible for the develop-ment of industry training programs utilizing advanced technology delivery systems. An industry practitioner as well as academician, he was the Owner/General Manager of the full-service Clarion Hotel and Conference Center in Lansing, Michigan. An accomplished author, his scholarly articles have appeared in The Cornell Quarterly. He has written 12 books, including texts translated into Spanish, Japanese, Chinese, Portuguese, and Croatian. He is now a full-time author who divides his professional writing and industry advising activities between offices in Okemos, Michigan and Gulfport, Mississippi.

• About the Authors iiiPreface ix1 Hospitality Industry Accounting 1Unique Aspects of the Hospitality Industry 1The Purpose of Accounting in the Hospitality Industry 3Branches of Accounting 5Why Hospitality Managers Use Managerial Accounting 11The Uniform System of Accounts 13Ethics and Hospitality Accounting 15Apply What You Have Learned 19Key Terms and Concepts 20Test Your Skills 202 Accounting Fundamentals Review 24Bookkeeping and Accounting 24The Accounting Equation 26Recording Changes to the Accounting Equation 27Generally Accepted Accounting Principles 37The Hospitality Business Cycle 48Apply What You Have Learned 52Key Terms and Concepts 52Test Your Skills 533 The Income Statement 58The Purpose of the Income Statement 58Income Statement Preparation 63Income Statement Analysis 83Apply What You Have Learned 104Key Terms and Concepts 104Test Your Skills 1054 The Balance Sheet 113The Purpose of a Balance Sheet 113Balance Sheet Formats 119Components of the Balance Sheet 126Balance Sheet Analysis 138Apply What You Have Learned 144Key Terms and Concepts 145Test Your Skills 1455 The Statement of Cash Flows 156Understanding Cash Flows 157The Purpose of the Statement of Cash Flows (SCF) 158Sources and Uses of Funds 160Creating the Statement of Cash Flows 167Statement of Cash Flows Analysis 182Apply What You Have Learned 185Key Terms and Concepts 186Test Your Skills 1866 Ratio Analysis 196Purpose and Value of Ratios 197Types of Ratios 200Comparative Analysis of Ratios 243Ratio Analysis Limitations 245Apply What You Have Learned 247Key Terms and Concepts 247Test Your Skills 2487 Food and Beverage Pricing 258Factors Affecting Menu Pricing 258Assigning Menu Prices 262Menu Price Analysis 269Apply What You Have Learned 287Key Terms and Concepts 287Test Your Skills 2888 Budgeting and Internal Controls 402Importance of Budgets 403Types of Budgets 405Operations Budget Essentials 408Developing an Operations Budget 409Monitoring an Operations Budget 417Cash Budgeting 427Managing Budgets through Internal Control 434Apply What You Have Learned 439Key Terms and Concepts 440Test Your Skills 4409 Forecasting in the Hospitality Industry 373The Importance of Accurate Forecasts 374Forecast Methodology 376Utilizing Trend Lines in Forecasting 393Apply What You Have Learned 396Key Terms and Concepts 397Test Your Skills 39710 Managerial Accounting for Costs 334The Concept of Cost 334Types of Costs 336Cost/Volume/Profit Analysis 354Apply What You Have Learned 362Key Terms and Concepts 363Test Your Skills 36311 Revenue Management for Hotels 294Establishing Room Rates 294Revenue Management 307Non-Room Revenue 320Apply What You Have Learned 324Key Terms and Concepts 324Test Your Skills 32512 Capital Investment, Leasing, and Taxation 450Capital Budgeting 451Capital Investment 454Financing Alternatives 467Taxation 475Apply What You Have Learned 483Key Terms and Concepts 484Test Your Skills 484Index 493

Lea R. Dopson is Dean and James A. Collins Distinguished Chair of The Collins College of Hospitality Management at Cal Poly Pomona. Previously, she was Department Chair of Hospitality and Tourism Management at the University of North Texas, and she taught at Cal Poly Pomona, the University of Houston, and Texas Tech University. Dr. Dopson holds an Ed.D. from the University of Houston, and an MBA and BS in Restaurant, Hotel, and Institutional Management from Texas Tech University. Her areas of teaching include hos-pitality managerial accounting, hospitality finance, and food and beverage cost controls. She has published in a variety of journals and has presented her research at numerous conferences. She has also co-authored with David Hayes, Food and Beverage Cost Control, published by John Wiley & Sons, which is presently in its sixth edition. Dr. Dopson has an ardent interest in international education, as is demonstrated by her creation of a MS in International Sustainable Tourism joint degree between the University of North Texas and Centro Agronómico Tropical de Investigación y Enseñanza (CATIE), Costa Rica. Also, Dr. Dopson lived 9 months in Zimbabwe, Africa, developing a degree program in interna-tional hospitality and tourism. In addition to her academic career, she has held various unit and corporate hospitality management positions with Texas Tech Foodservice, Sheraton Hotels, and Bristol Hotels.David K. Hayes earned his Ph.D. in Education from Purdue University, as well as MS and BS degrees in Hotel and Restaurant Management. He held faculty positions at Purdue University, Texas Tech University, and the University of Houston. At Texas Tech University, he founded the Restaurant Hotel and Institutional Management (RHIM) program and served as Chair of the Department of Nutrition, Education and Restaurant/Hotel Management. Dr. Hayes was Vice President of the Educational Institute (E.I.) of the American Hotel & Lodging Association (AH&LA) and was responsible for the develop-ment of industry training programs utilizing advanced technology delivery systems. An industry practitioner as well as academician, he was the Owner/General Manager of the full-service Clarion Hotel and Conference Center in Lansing, Michigan. An accomplished author, his scholarly articles have appeared in The Cornell Quarterly. He has written 12 books, including texts translated into Spanish, Japanese, Chinese, Portuguese, and Croatian. He is now a full-time author who divides his professional writing and industry advising activities between offices in Okemos, Michigan and Gulfport, Mississippi.

• About the Authors iiiPreface ix1 Hospitality Industry Accounting 1Unique Aspects of the Hospitality Industry 1The Purpose of Accounting in the Hospitality Industry 3Branches of Accounting 5Why Hospitality Managers Use Managerial Accounting 11The Uniform System of Accounts 13Ethics and Hospitality Accounting 15Apply What You Have Learned 19Key Terms and Concepts 20Test Your Skills 202 Accounting Fundamentals Review 24Bookkeeping and Accounting 24The Accounting Equation 26Recording Changes to the Accounting Equation 27Generally Accepted Accounting Principles 37The Hospitality Business Cycle 48Apply What You Have Learned 52Key Terms and Concepts 52Test Your Skills 533 The Income Statement 58The Purpose of the Income Statement 58Income Statement Preparation 63Income Statement Analysis 83Apply What You Have Learned 104Key Terms and Concepts 104Test Your Skills 1054 The Balance Sheet 113The Purpose of a Balance Sheet 113Balance Sheet Formats 119Components of the Balance Sheet 126Balance Sheet Analysis 138Apply What You Have Learned 144Key Terms and Concepts 145Test Your Skills 1455 The Statement of Cash Flows 156Understanding Cash Flows 157The Purpose of the Statement of Cash Flows (SCF) 158Sources and Uses of Funds 160Creating the Statement of Cash Flows 167Statement of Cash Flows Analysis 182Apply What You Have Learned 185Key Terms and Concepts 186Test Your Skills 1866 Ratio Analysis 196Purpose and Value of Ratios 197Types of Ratios 200Comparative Analysis of Ratios 243Ratio Analysis Limitations 245Apply What You Have Learned 247Key Terms and Concepts 247Test Your Skills 2487 Food and Beverage Pricing 258Factors Affecting Menu Pricing 258Assigning Menu Prices 262Menu Price Analysis 269Apply What You Have Learned 287Key Terms and Concepts 287Test Your Skills 2888 Budgeting and Internal Controls 402Importance of Budgets 403Types of Budgets 405Operations Budget Essentials 408Developing an Operations Budget 409Monitoring an Operations Budget 417Cash Budgeting 427Managing Budgets through Internal Control 434Apply What You Have Learned 439Key Terms and Concepts 440Test Your Skills 4409 Forecasting in the Hospitality Industry 373The Importance of Accurate Forecasts 374Forecast Methodology 376Utilizing Trend Lines in Forecasting 393Apply What You Have Learned 396Key Terms and Concepts 397Test Your Skills 39710 Managerial Accounting for Costs 334The Concept of Cost 334Types of Costs 336Cost/Volume/Profit Analysis 354Apply What You Have Learned 362Key Terms and Concepts 363Test Your Skills 36311 Revenue Management for Hotels 294Establishing Room Rates 294Revenue Management 307Non-Room Revenue 320Apply What You Have Learned 324Key Terms and Concepts 324Test Your Skills 32512 Capital Investment, Leasing, and Taxation 450Capital Budgeting 451Capital Investment 454Financing Alternatives 467Taxation 475Apply What You Have Learned 483Key Terms and Concepts 484Test Your Skills 484Index 493

Lea R. Dopson is Dean and James A. Collins Distinguished Chair of The Collins College of Hospitality Management at Cal Poly Pomona. Previously, she was Department Chair of Hospitality and Tourism Management at the University of North Texas, and she taught at Cal Poly Pomona, the University of Houston, and Texas Tech University. Dr. Dopson holds an Ed.D. from the University of Houston, and an MBA and BS in Restaurant, Hotel, and Institutional Management from Texas Tech University. Her areas of teaching include hos-pitality managerial accounting, hospitality finance, and food and beverage cost controls. She has published in a variety of journals and has presented her research at numerous conferences. She has also co-authored with David Hayes, Food and Beverage Cost Control, published by John Wiley & Sons, which is presently in its sixth edition. Dr. Dopson has an ardent interest in international education, as is demonstrated by her creation of a MS in International Sustainable Tourism joint degree between the University of North Texas and Centro Agronómico Tropical de Investigación y Enseñanza (CATIE), Costa Rica. Also, Dr. Dopson lived 9 months in Zimbabwe, Africa, developing a degree program in interna-tional hospitality and tourism. In addition to her academic career, she has held various unit and corporate hospitality management positions with Texas Tech Foodservice, Sheraton Hotels, and Bristol Hotels.David K. Hayes earned his Ph.D. in Education from Purdue University, as well as MS and BS degrees in Hotel and Restaurant Management. He held faculty positions at Purdue University, Texas Tech University, and the University of Houston. At Texas Tech University, he founded the Restaurant Hotel and Institutional Management (RHIM) program and served as Chair of the Department of Nutrition, Education and Restaurant/Hotel Management. Dr. Hayes was Vice President of the Educational Institute (E.I.) of the American Hotel & Lodging Association (AH&LA) and was responsible for the develop-ment of industry training programs utilizing advanced technology delivery systems. An industry practitioner as well as academician, he was the Owner/General Manager of the full-service Clarion Hotel and Conference Center in Lansing, Michigan. An accomplished author, his scholarly articles have appeared in The Cornell Quarterly. He has written 12 books, including texts translated into Spanish, Japanese, Chinese, Portuguese, and Croatian. He is now a full-time author who divides his professional writing and industry advising activities between offices in Okemos, Michigan and Gulfport, Mississippi.

• About the Authors iiiPreface ix1 Hospitality Industry Accounting 1Unique Aspects of the Hospitality Industry 1The Purpose of Accounting in the Hospitality Industry 3Branches of Accounting 5Why Hospitality Managers Use Managerial Accounting 11The Uniform System of Accounts 13Ethics and Hospitality Accounting 15Apply What You Have Learned 19Key Terms and Concepts 20Test Your Skills 202 Accounting Fundamentals Review 24Bookkeeping and Accounting 24The Accounting Equation 26Recording Changes to the Accounting Equation 27Generally Accepted Accounting Principles 37The Hospitality Business Cycle 48Apply What You Have Learned 52Key Terms and Concepts 52Test Your Skills 533 The Income Statement 58The Purpose of the Income Statement 58Income Statement Preparation 63Income Statement Analysis 83Apply What You Have Learned 104Key Terms and Concepts 104Test Your Skills 1054 The Balance Sheet 113The Purpose of a Balance Sheet 113Balance Sheet Formats 119Components of the Balance Sheet 126Balance Sheet Analysis 138Apply What You Have Learned 144Key Terms and Concepts 145Test Your Skills 1455 The Statement of Cash Flows 156Understanding Cash Flows 157The Purpose of the Statement of Cash Flows (SCF) 158Sources and Uses of Funds 160Creating the Statement of Cash Flows 167Statement of Cash Flows Analysis 182Apply What You Have Learned 185Key Terms and Concepts 186Test Your Skills 1866 Ratio Analysis 196Purpose and Value of Ratios 197Types of Ratios 200Comparative Analysis of Ratios 243Ratio Analysis Limitations 245Apply What You Have Learned 247Key Terms and Concepts 247Test Your Skills 2487 Food and Beverage Pricing 258Factors Affecting Menu Pricing 258Assigning Menu Prices 262Menu Price Analysis 269Apply What You Have Learned 287Key Terms and Concepts 287Test Your Skills 2888 Budgeting and Internal Controls 402Importance of Budgets 403Types of Budgets 405Operations Budget Essentials 408Developing an Operations Budget 409Monitoring an Operations Budget 417Cash Budgeting 427Managing Budgets through Internal Control 434Apply What You Have Learned 439Key Terms and Concepts 440Test Your Skills 4409 Forecasting in the Hospitality Industry 373The Importance of Accurate Forecasts 374Forecast Methodology 376Utilizing Trend Lines in Forecasting 393Apply What You Have Learned 396Key Terms and Concepts 397Test Your Skills 39710 Managerial Accounting for Costs 334The Concept of Cost 334Types of Costs 336Cost/Volume/Profit Analysis 354Apply What You Have Learned 362Key Terms and Concepts 363Test Your Skills 36311 Revenue Management for Hotels 294Establishing Room Rates 294Revenue Management 307Non-Room Revenue 320Apply What You Have Learned 324Key Terms and Concepts 324Test Your Skills 32512 Capital Investment, Leasing, and Taxation 450Capital Budgeting 451Capital Investment 454Financing Alternatives 467Taxation 475Apply What You Have Learned 483Key Terms and Concepts 484Test Your Skills 484Index 493