Week 7 - Friday

Common-size vertical income statements show each expense item as a percent of total sales revenue.

• True

• False

Comparative horizontal  balance sheets show the Change in individual account balances in both dollar and percentage terms from one period to the next.

• True

• False

Common-size vertical income statements:

• Express total sales revenue as 100% and show all other items as a percentage of that.

• Show gross profit as 100% and express all other items as a percentage of that.

• Show net income as 100% and express all other items as a percentage of that.

• What the finance

Sales revenue in Period 1 is $100,000 and food cost is 40%. Sales revenue in Period 2 is $104,000 and food cost is 44%. The percent change in food cost percentage from Period 1 to Period 2 is:

• 4%

• $4,400

• 4% of $4,000

• 10%

The term FIFO stands for:

• First-in, first-operating

• First-in, fast-out

• First-in, first-ordered

• First-in, first-out

Departmental income statements are typical of the hotel industry

• True

• False

Retained earnings are the link between the income statement and the balance sheet

• True

• False

Gross margin is:

• Income before income tax

• Sales revenue less indirect expenses

• Sales revenue less cost of sales

• Sales revenue less rent

Which of the following is normally not considered a current asset in a hotel?

• Linen inventory

• Cash

• Prepaid expense

• Marketable securities