Pearson New International Edition International pcl tp indd 1

FRONT OFFICE SEMANTICS
Owner’s equity:
What remains after subtracting what the business owes others (its liabilities) from what
the business owns (its assets).
Under accepted accounting rules, dollars on the “left” side of the accounting for-
mula’s equal sign must always equal the value on the “right” side.
Accounting
Formula
Owner’s Equity
=
Liabilities
+
Assets
FIGURE 2
Fundamental accounting formula.
GUEST CHARGES, PAYMENT, AND CHECK-OUT
501

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GUEST CHARGES, PAYMENT, AND CHECK-OUT
In general, hotel owners or accountants are not legally required to follow any
specific procedures when recording financial transactions. There are, however, laws
requiring owners to properly account for, report, and pay taxes when due, to file
certain documents with the government, and to supply accurate business data.
Therefore, many hotel companies require their managers to use a system of account-
ing procedures created specifically for hotels. These have been developed by hospi-
tality accountants in conjunction with the Educational Institute (EI) of the American
Hotel & Lodging Association and are called the Uniform System of Accounts for