Question 1

Which of the following would be on a hotel income statement ABOVE Gross Operating Profit?

Accepted Answer

A)   Sales and Marketing
B)   Rent
C)   Non-operating income
D)   Income taxes A

Question 2

A company borrows $ 100,000 on November 1st, 2039. The interest percentage is 4% annually, with interest and installment payments on the first of February, June and October of each year. What is the interest expense for January 2040?

Accepted Answer

A)   $ 111.11
B)   $ 333.33
C)   $ 1,333 B

Question 3

A company puts all of their sales in a given month in their income statement for that month, as revenues, even though some of those sales were credit sales. Of which accounting principle is this an example?

Accepted Answer

A)   Recognition
B)   Materiality
C)   Conservatism
D)   Matching A

Question 4

Each year, the 'Kappa Delta Phi' sorority pays a whole year's rent for their chapter house in advance on 1 September. Their payments for 20X1 and 20X2 are as follows: 1 September, 20X1: $ 25,000, and 1 September, 20X2: $ 26,000. What rent expense will be on their 20X2 income statement?

Accepted Answer

A)   $ 25,250
B)   $ 25,333
C)   $ 25,500
D)   $ 26,000

Question 5

Accounts receivable are $ 250,000. Accounts payable are $ 100,000. Actual revenue was 3,000,000; budgeted revenue was $ 2,850,000. Balance sheet total is $ 7,500,000. Vertical analysis would give which value for accounts payable?

Accepted Answer

A)   0.013
B)   0.033
C)   0.035
D)   0.052

Question 6

When preparing common-size statements, items on the balance sheet are generally stated as a percentage of _________________ and items on the income statement are generally stated as a percentage of __________________

Accepted Answer

A)   Total Assets; Net Income
B)   Total Assets; Revenue
C)   Total Owner's equity; Revenue
D)   Net income; Total (Long-term debt + Owner's equity)

Question 7

Expressed as a common-size percentage, inventories are probably highest for companies in which industry?

Accepted Answer

A)   Finance - like Deutsche Bank, Chase Manhattan, Barclays
B)   Airlines - like Delta Airlines, Air China, Air Iberia
C)   Retail - like Carrefour, Whole Foods Market, Amazon
D)   Hospitality - like Marriott International, the Singapore Raffles Hotel, the New York Waldorf Astoria Hotel

Question 8

Can one infer from the income statement if a hotel is third-party managed?

Accepted Answer

A)   Yes, the General Manager's salary and related expenses are shown separately on the income statement.
B)   Yes, the associated fees are an expense just below GOP on the income statement
C)   No, one should study the balance sheet to find out if that is the case
D)   No, such cannot be inferred from studying any of the financial statements

Question 9

The Recognition principle entails that revenues from selling goods or services are recognized in the period in which the goods are: __________ and ______________. For services the recognition for both revenues and expenses apply when these are _________________.

Accepted Answer

Question 10

The supplier to the school cafeteria is stuck with a lot of unsold whole turkeys just before Christmas 20X8. They shape the meat into slices to be put on bread and sell this at a discount. The F&B manager decides to buy a few pounds on December 23rd, the last day of school that year, and put it in the freezer for selling it sometime in January 20X9. She pays the bill on January 15th, 20X9. In which month will the cost of sales be recorded in the income statement of the cafeteria?

Accepted Answer

A)   At the time they sell the meat: income statement January 20X9.
B)   At the time they pay the bill: income statement January 20X9.
C)   C At the time they decide to buy the meat: income statement December 20X8.

Question 11

Which of the following percentages, if known for a hotel, add up to 100 by definition?

Accepted Answer

A)   A Department profit percentages
B)   Base and incentive management fee percentages
C)   Gross and net profit margin
D)   Sales mix percentages

Question 12

In determining depreciation amounts, you need to know or establish:

Accepted Answer

A)   Useful life, salvage value, residual value
B)   Residual value, salvage value, interest rate percentage.
C)   Useful life, depreciation method, residual value

Question 13

The following are all Undistributed Operating Expenses (all in the local currency). What is the total for Administrative and General? Electricity 5,000; HR department labor 15,000; Accounting department other expenses 1,000; Advertising 8,000; GM's salary + benefits 10,000

Accepted Answer

A)   22000
B)   26000
C)   31000
D)   34000

Question 14

A piece of equipment was purchased for € 10,000 on July 1st, 2019. Its useful life is expected to be 3 years and its residual value $1,000. Management uses a straight-line depreciation methodology. What is the asset book value on January 1st, 2020, and the depreciation expense for the month of December 2019?

Accepted Answer

A)   9,000 and 3,000, respectively
B)   7,000 and 250, respectively
C)   8,500 and 250, respectively
D)   10,000 and 3,000, respectively

Question 15

A company borrows $ 100,000 on October 1st, 2039. The interest percentage is 4% annually, with interest and installment payments on the first of February, June, and October of each year. The loan will be repaid over 5 years, straight-line. What is the interest payment on the first of February 2040?

Accepted Answer

A)   $ 333
B)   $ 1,000
C)   $ 1,333
D)   $ 1,667

Exam 1: Measuring Performance