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Hospitality Industry Managerial Accounting 8th Edition

Hospitality Industry Managerial Accounting (8th Edition)

Book Edition8th Edition
Author(s)Schmidgall
ISBN9780866124973
PublisherEduc. Inst. Of The American Hotel & Motel Assoc.
SubjectAccounting

Chapter 10, End of Chapter, Review Questions, Exercise 1

Page 525

Here is a tip:

Budgets are the future forecasts, which are prepared by the company for estimation of revenues and expenditure.

Explanation

  • Past trend analysis- In past trend analysis, the budget figures of previous year are compared with the budget figures of present year. The actual expenses are also compared with the previous years expenses.
  • Future plans- Budgeting is done by keeping the future plans in mind and every future expense has to be taken into account to get the clear picture.
  • Expense forecast- Forecasting of all the future expenses, while formulating a budget is mandatory in framing a budget.
  • Fund availability- Consider all the sources of fund available in the market to meet all the expenses.

Verified Answer

  • Past trend analysis
  • Future plans
  • Expense forecast 
  • Fund availability
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