Belongs to Principle of Hospitality Finance

Chapter 2: Accounting Fundamentals Review

13. Dividends are amounts paid to managers based on their annual net operating income.

a. True

b. False

14. At the end of the accounting period, temporary owners equity accounts are closed out.

a. True

b. False

15. The difference between a T accounts total debits and total credits is called the account balance.

a. True

b. False

16. A liability T account will normally have a debit balance.

a. True

b. False

17. The going concern principle assumes that the business will continue to exist and there is no intention to liquidate its assets.

a. True

b. False

18. Accounts receivable represent the amount of money owed to a business by others (such as customers) and thus is considered to be one of that businesss asset accounts.

a. True

b. False

19. ACE and LIP are helpful ways to understand how to debit and credit all the various types of accounts related to financial statements.

a. True

b. False

20. ACE accounts are increased by making an entry in the credit column..

a. True

b. False

21. The FASB publishes recommendations for accounting procedures standardization which are known as generally accepted accounting principles.

a. True

b. False

22. The hospitality business cycle is used to describe the seasonal nature of the hospitality industry.

a. True

b. False