Accounting for Hotels and Restaurants

A hotel purchased cleaning supplies worth SAR 5,000 on credit, to be paid after 30 days. What will this transaction increase?

• Cash

• Accounts Payable

• Revenue

• Prepaid Expenses

A travel agency sold packages worth SAR 8,000 to a corporate client, but payment will come next month. Which account will increase?

• Accounts Receivable

• Cash

• Accrued Expenses

• Liabilities

At the end of December, a resort owes electricity charges for the month but has not received the bill yet. This unpaid expense should be recorded as:

• Prepaid Expense

• Accrued Expense

• Inventory

• Working Capital

Which of the following is an example of administrative expense for a hotel?

• Chef’s salary

• Front desk stationery

• Room cleaning supplies

• Restaurant food cost

A small café has monthly fixed costs of SAR 10,000. It sells drinks at SAR 20 each, with a cost of SAR 10 per drink. How many drinks must be sold to break even?

• 500

• 1,000

• 2,000

• 250

The hotel expected to spend SAR 15,000 on utilities, but the actual expense was SAR 20,000. What does this indicate?

• Budget surplus

• Budget deficit

• Cash surplus

• Capital expense

Which situation shows a cash inflow?

• Paying suppliers

• Buying new computers

• Receiving payment from a guest

• Paying employee salaries

A hotel bought new furniture for SAR 50,000 to be used for 5 years. The gradual reduction in its value is called:

• Amortization

• Depreciation

• Accrual

• Expense recognition

Which of the following is an example of an intangible asset for a travel company?

• Office building

• Delivery van

• Trademark

• Computer

If a restaurant has current assets of SAR 80,000 and current liabilities of SAR 50,000, its working capital is:

• SAR 30,000

• SAR 130,000

• SAR 40,000

• SAR 50,000