Belongs to Principle of Hospitality Finance

Chapter 3: The Income Statement

1. The process of considering how a businesss expenses will be detailed for reporting purposes is called .

a. Expense gathering

b. Expense classification

c. Expense timing

d. Expense payment

2. Which of the following is not relevant to the analysis of a businesss revenue?

a. Changes in the property tax rate

b. The number of days included in the accounting period

c. Differences in date placement of significant holidays (i.e. month or day of week)

d. Changes in selling prices

3. Given $273,904 in food costs and $848,000 in food revenues, calculate the food cost percentage.

a. 35.64%

b. 32.30%

c. 67.70%

d. 14.77%

4. Given a net income of $82,517 and total sales of $1,231,600, calculate profit margin.

a. 14.93%

b. 85.07%

c. 6.70%

d. 68.85%

5. In order to evaluate the dollars or percentage change in revenues, expenses, or profits experienced by a business, a manager would use.

a. Vertical analysis

b. Common-size analysis

c. Horizontal analysis

d. Managerial analysis