ABSTRACT
A hotel’s financial management starts in the front office in close collaboration with the accounting office. Financial management is primarily based on the accurate and timely processing of guest accounts. The generally accepted accounting principles must be adhered to when a hospitality operation distributes its financial statements to external users. If a hospitality operation’s shares are publicly traded, the financial statements must also adhere to other rules as established in the jurisdiction where the shares are traded. An accounting standard is a set of rules and regulations containing detailed guidance on the preparation of financial accounts. Financial statements are the records that summarise the financial activities of a business, an individual or another entity. The balance sheet, called the ‘statement of financial position’ is a list of all of a hospitality operation’s owned assets, its incurred debts, and the sum of investments by the owners.
