Pearson New International Edition International pcl tp indd 1

Transfers to House Accounts
Sometimes a guest’s account balance is transferred to one or more house accounts.
Assume that Donna Berger is checking out. She says that, although her hotel stay
was fine, the meal she charged to her room was substandard because of poor service.
She says she will continue to stay at the hotel because she likes it and often recom-
mends it to others, and she wants the FOM to know about her experience. Most
FOMs in this situation would agree that some form of compensation is appropriate.
From an accounting perspective, Ms. Berger has a “balance due” in the food and bev-
erage portion of the hotel’s accounts receivable. To eliminate this amount but to bal-
ance the hotel’s overall accounts, Ms. Berger’s accounts receivable balance for the
meal would be transferred to the manager’s house account to eliminate (move) her
charge. At the end of the accounting period, the balance in the manager’s house
account will be reduced to zero, and the amounts in it are transferred to a guest rela-
tions or guest comps expense account.
House accounts serve many purposes. Managers use them to compensate guests
for difficulties encountered during their stays. Sales and marketing staff use them to
promote the hotel by providing complimentary food, beverages, or rooms to poten-
tial guests. Telephone and fax charges, postage, laundry, and taxicab charges are
among other house accounts that may be established for staff use. Any guest account
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