Unit 1 - Night Audit

Question 1

The hotel’s financial management starts in the _____. Of course, this responsibility is shared with the controller’s office, but it begins with the accurate and timely processing of guest accounts.

Answer 1

Front Office

Question 2

The night auditor, provides a balance of debit and credit entries to guest and departmental accounts, which include _______.

Answer 2

income- and expense-generating areas of the hotel (e.g., restaurants, gift shop, banquets)

Question 3

The ____ is the control process whereby the financial activity of guests’ Accounts are maintained and balanced. This process tracks charges and payments (debits and credits) and the departmental receipts and charges on a daily basis.

Answer 3

Night Audit

Question 4

The working definition of ____ encompasses not only the mechanical proofing of charge
land payment totals but also the further review of account activity by management.

Answer 4

Night audit

Question 5

The ______ manager monitors the credit activity of guests, projects daily cash flow from room sales, and monitors projected and actual sales for the
various departments.

Answer 5

Front Office Manager

Question 6

What’s the purpose of the night audit report/reviews to the general manager?

Answer 6

Through night audit current and cumulative data, the general manager can evaluate if the marketing plan achieves the profit goals income generating departments and to make financial decisions effectively.

Question 7

The ______ has many responsibilities in addition to preparing the night audit report. This person also must check in and check out guests who arrive or depart after 11:00 p.m., process reservations, perform the duties of security guard, monitor fire safety systems, act as cashier for banquet functions, and perform the work of the manager on duty.

Answer 7

Night auditor

Question 8

The night auditor acts as a communication link between the guest and hotel operations during the ____ shift.

Answer 8

11pm to 7am

Question 9

The ______ is one of those reports that is not put on the shelf and forgotten. Management uses it to verify the integrity of the guest accounts and to review operational effectiveness, which is the ability of a manager to control costs and meet profit goals.

Answer 9

Night audit report

Question 10

The six basic steps involved in preparing a night audit are?

Answer 10

1. Posting room and tax charges
2. Assembling guest charges and payments
3. Reconciling departmental financial activities
4. Reconciling the accounts receivable
5. Running the trial balance
6. Preparing the night audit report

Question 11

Posting Room and Tax Charges
After the night auditor reviews messages from other front office staff, reviews guests who checked out of the hotel, extends any guest stays, reviews all room rates, and prints a variance report, his or her first task is to post room and tax charges to all accounts. The PMS can easily post these charges to the _______.

Answer 11

Electronic Folios

Question 12

Assembling Guest Charges and Payments

The guest charges option of the night audit module in a property management system can sort and total all departmental charges and payments posted to the electronic folios from the point-of-sale systems that interface with the ____. These data are accurate as long
as the person entering the charges at the point-of-sale terminal keys them in accurately.

Answer 12

PMS

Question 13

Reconciling Departmental Financial Activities
The ____ totals option of the night audit module in the PMS report total sales by the department.

Answer 13

Department totals

Question 14

Reconciling Departments Financial Activities
The cashier option of the night audit module in the PMS reports the amount of cash, credit cards, and coupons received and discounts processed during the shift. The total amount of cash received by each cashier issued a cash drawer must be verified against __________.

Answer 14

the total money deposited for that shift

Question 15

Reconciling Accounts Receivable
____ is an accounts receivable held at the front office. The _____ is a collection of guest accounts of persons who are not registered with the hotel. They have either received approval for direct billing privileges or paid a deposit on a future banquet, meeting, or reception.

Answer 15

City Ledger

Question 16

Reconciling Accounts Receivable
The ____ account—an account receivable that tracks bank, commercial,
private label, and intersell credit cards such as VISA, MasterCard, and JCB—is held at the front office.

Answer 16

Master Credit Card Account

Question 17

Reconciling Accounts Receivable
The ________ options of the night audit module of a PMS produces a report of the activity on the city ledger and master credit card accounts.

Answer 17

city ledger and accounts receivable

Question 18

Running the _____
A _______ is a first run on a set of debits to determine their accuracy compared to a corresponding set of credits. The ______ helps the night auditor focus on accounts in which charges may have been posted or reported incorrectly.

Answer 18

Trial Balance

Question 19

Running the Trial Balance
It is important that the night auditor compare the _____ for each department processed by desk clerks and
cashiers.

Answer 19

departmental totals against transfers and paid-out slips

Question 20

“Why should the night audit report be prepared?”

Answer 20

It generates a massive amount of daily operational financial feedback that provides an immediate opportunity for managers to react and respond. General managers and supervisors must use the information to improve the situations that resulted from their efforts.

Question 21

The night audit report is key in maximizing the efficiency of a hotel. The daily figures regarding ____,____,____,_____ suggest opportunities to improve a slow sales period. Guests who demand an accurate folio complete with guest charges can be helped more efficiently as a result of this process?

Answer 21

room occupancy, yield percentage, average daily rate, and revenue per available room (RevPAR)

Question 22

Each department in the hotel is required to provide a daily sales report to the front
office. These figures are listed and compared to the ____. General managers of hotels use these figures to determine the profitability of income-generating departments and the success of marketing programs.

Answer 22

Budget Goal

Question 23

Bank deposits are also part of the night audit. In large hotels, bank deposits are made several times a day to satisfy ____. The bank deposit includes both ____ and ____ deposits.

Answer 23

Security Concerns
Cash and Credit Card Deposits

Question 24

Some hotels run the traditional three shifts (7:00 a.m.–3:00 p.m., 3:00 p.m.–11:00 p.m., and 11:00 p.m.–7:00 a.m.) for cashiers. In larger hotels, several cashiers may work each shift. No matter how many cashiers work per shift, each is responsible for actual cash and credit card payments received; these are compared to ____.

Answer 24

PMS totals

Question 25

The ______ report is a listing of occupancy statistics from the previous day, such
as occupancy percentage, yield percentage, average daily rate, RevPAR, and number of guests. Data such as these are necessary for monitoring the operation of a financially
viable business. The general manager, controller, front office manager, and director of marketing and sales review these statistics daily.

Answer 25

Manager’s report

Question 26

The _____ figure represents the total of posted daily guest room charges. The night auditor obtains this figure from the PMS by activating the _____ feature, an electronic feature that adds all posted room rate amounts previously entered into one grand total. This figure is only as accurate as the posting of daily room rates.

Answer 26

Room sales figure
Cumulative total fearure

Question 27

The ________ figures comprises all sales incurred at restaurants or food outlets in the hotel.

Answer 27

Total restaurant sales figures

Question 28

_____ report, a financial activity report produced by a department in a hotel that
reflects daily sales activities with accompanying cash register tapes or point-of-sale audit tapes from each of the restaurants or food outlets.

Answer 28

Daily sales report

Question 29

The _____ figure is also obtained from the daily sales reports.

Answer 29

Sales tax

Question 30

The general manager can use ____figures to determine how effective the food and beverage manager is in controlling related expenses for this division. ______ also indicates how effective the director of marketing and sales is in generating business.

Answer 30

Banquet sales figures

Question 31

Sales figures from the ______ are reported separately because the food and beverage manager must determine how well cost-control efforts are maintained for that department, and the director of marketing and sales may want to research the success of certain marketing and merchandising campaigns.

Answer 31

lounges and banquets

Question 32

Guest rooms can also
be rented on a half-day rate for business meetings.
T or F?

Answer 32

True

Question 33

_______ is reported separately at hotels that charge fees for the rental of facilities when no food or beverage is ordered. For example, banquet rooms may be rented for seminars, meetings, demonstrations, and shows. Because ______ represents a potentially large profit area (especially during slow banquet sales periods), general managers want to know how effective the marketing and sales department is in maximizing this
profit center.
T or F?

Answer 33

Room rental

Question 34

What’s a Valet service?

Answer 34

Dry cleaning and Laundry services

Question 35

The telephone industry was deregulated in the early 1980s, call accounting became
standard practice in hotels. This allowed hotels to set individual ____rates, or rates for adding service charges for out-of-state long-distance telephone service.

Answer 35

Surcharge rates

Question 36

The telephone department is a profitable area in the hotel business.
T or F?
Why?

Answer 36

True
Because all phone calls are charged to the guest folio, an accurate accounting of the charges is necessary. In a hotel with a call-accounting system that interfaces with a property management system, this tally is obtained electronically.

Question 37

The use of health facilities at a hotel may be provided free to guests. However, other products and services—such as swimsuits, health-related products and equipment, the services of a masseur or masseuse, sports lessons, and rental equipment—are sold.
T or F?

Answer 37

True

Question 38

The ______ figures represent all the cash and charge transactions for the day, reflecting all the previously reported figures. General managers compare the actual and budgeted figures to determine how well operations have met the financial goals of the hotel.

Answer 38

total revenue and total write-off

Question 39

Throughout the business day, the controller requests front desk clerks or cashiers to post business checks and cash received from credit card companies, direct billing accounts, and city ledger accounts. The charges from these groups were previously moved to _____.

Answer 39

Accounts Receivable

Question 40

The ______manager maintains an analysis of the accounts receivable balance that indicates the source of each account receivable—city ledger, direct billing, or various credit cards.
(It is important to note here that city ledger accounts may have a credit balance but are maintained as an account receivable. For example, if a guest pays a $500 deposit on a future banquet, a credit balance is maintained on the account. When this credit balance is computed with other debit balances, a debit balance is realized.)

Answer 40

Front office

Question 41

The controller uses this information to track the _____ accounts, or the stage of the
payment—such as 10 days old, 30 days overdue, 60 days overdue—and to operate an overdue payment collection program.

Answer 41

Aging of accounts

Question 42

The ______ report, a PMS listing of departmental totals by day, period to date, and year to date, is useful to general managers and to department managers and supervisors. This report is reviewed daily to indicate how successful a department manager was in achieving sales the previous day. This tool is important in discussing strategies for the successful achievement of
financial goals.

Answer 42

Daily flash report