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3rd/4th Sem Hotel Accountancy Notes

Uniform System of Accounts for Hotels

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Last updated: 13 July 2023

If Accounting hurts you, chances are you lack at its basic, here as a short booklet to help you revise the basic quickly.

Uniform System of Account is used by several hotels/restaurants of the same accounting (costing and sale) principal and/or practices. Uniform accounting is thus not a separate technique or method. It simply denotes a situation in which a number of hotels/restaurants may use the same accounting (costing and sales) principal in such a way as to produce sales, valuable conclusions can be drawn and one hotel can be compared to others.

There are many Advantages of Uniform System of Accounts like:-

Transfer: The staff can be transferred from one hotel to other very easily as due to same accounting system it does not take long for the staff to adjust to the new hotel.

Comparison: Since hotels are following the same accounting system so they can be compared amongst each other. One can find out the causes for higher cost or lower sales and take corrective measure.

Buying Shares: General public or financial institution s can compare the hotels’ profitability and it helps them in deciding the price. They should pay to buy the equity take over or to pay a loan.

Lease or Rent: It is easy to decide on the rent or a lease for the hotels/restaurants. Both tenants and the owner can study and compare the expenditure and income of various hotels/ restaurants and this will help to decide on the rental value or lease money for the hotel/restaurant on yearly or season basic.

At the same time Uniform System of Accounts has few difficulties in its implementation like:-

  • The existence of Cooperation, mutual trust and a policy of give and take amongst the participating member hotels/restaurants.
  • Free exchanges of Ideas and Technology, Knowledge amongst the member hotels/restaurants.
  • The free exchange of information regarding a system of costing stocks, depreciation, etc.
  • The absence of rivalry and sense of jealousy amongst the member hotels/restaurants.
  • Use of common heads to record sales of a hotel like Room Sale, Food Sale, Beverage Sale, Laundry Income, etc.
  • Use the common terminology and procedure regarding cost apportionment and cost control.

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Syllabus BHM206

01 Uniform System of Accounts for Hotels

  1. Introduction to Uniform system of accounts
  2. Contents of the Income Statement
  3. Practical Problems
  4. Contents of the Balance Sheet (under uniform system)
  5. Practical problems
  6. Departmental Income Statements and Expense statements (Schedules 1 to 16)
  7. Practical problems

02 Internal Control

  1. Definition and objectives of Internal Control
  2. Characteristics of Internal Control
  3. Implementation and Review of Internal Control

03 Internal Audit and Statutory Audit

  1. An introduction to Internal and Statutory Audit
  2. Distinction between Internal Audit and Statutory Audit
  3. Implementation and Review of internal audit

04 Departmental Accounting

  1. An introduction to departmental accounting
  2. Allocation and apportionment of expenses
  3. Advantages of allocation
  4. Draw-backs of allocation
  5. Basis of allocation
  6. Practical problems