HOTEL BALANCE SHEETS

BALANCE SHEET
• THE BALANCE SHEET IS A STATEMENT OF THE ASSETS, LIABILITIES, AND CAPITAL OF A BUSINESS
OR OTHER ORGANIZATION AT A PARTICULAR POINT IN TIME, DETAILING THE BALANCE OF
INCOME AND EXPENDITURE OVER THE PRECEDING PERIOD.
• THE CONTENT OF ALL BALANCE SHEETS IS FAIRLY CONSISTENT BECAUSE OF THE REPORTING
REQUIREMENTS ESTABLISHED BY THE FINANCIAL ACCOUNTING STANDARD BOARD (FASB) AND
(GAAP).
• A BALANCE SHEET IS VERY IMPORTANT BECAUSE IT PRESENTS THE “FINANCIAL HEALTH” OF A
COMPANY ON A CLOSING DATE OR CERTAIN DATE.IT DEPENDS ON THE SITUATION.
• THE INCOME STATEMENT SHOWS THE PROFIT OF THE PERIOD OF TIME, WHILE THE BALANCE
SHEETS SHOWS WHAT A COMPANY “OWNS OR OWES” ON A GIVEN DATE.
ELEMENTS AND CONVENTION:
• THE BALANCE SHEET IS ALSO CALLED “THE STATEMENT OF FINANCIAL POSITION”. IT
PURPOSE IS TO REPORT A COMPANY’S RESOURCES AND COMMITMENTS AS OF SPECIFIED
DATE. COMPANIES ISSUING ITS ANNUAL STATEMENTS ON A FINANCIAL YEAR BASIS WOULD
USE THE FOLLOWING HEADLINES:
• FOR INCOME STATEMENT : BALANCE SHEET
COMPANY NAME COMPANY NAME
INCOME STATEMENT STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED DECEMBER 31, 20XX FOR DECEMBER 31, 20XX.
ELEMENTS AND CONVENTION:
• ELEMENTS :
THE BASIC ELEMENTS OF BS ARE REPRESENTED BY THE FOLLOWING ACCOUNTING EQUATION:
ASSETS = LIABILITIES + EQUITY

CONVENTIONS :
THE GOING CONCERN PRINCIPAL AND HISTORICAL COST PRINCIPAL , THIS ALLOWS THE READER
TO MEASURE THE USE OF RESOURCES.
ASSETS
• AN ASSET IS A RESOURCE WITH ECONOMIC VALUE THAT AN INDIVIDUAL, CORPORATION, OR
COUNTRY OWNS OR CONTROLS WITH THE EXPECTATION THAT IT WILL PROVIDE A FUTURE
BENEFIT.
• ASSETS ARE REPORTED ON A COMPANY'S BALANCE SHEET AND ARE BOUGHT OR CREATED TO
INCREASE A FIRM'S VALUE OR BENEFIT THE FIRM'S OPERATIONS.
• AN ASSET CAN BE THOUGHT OF AS SOMETHING THAT, IN THE FUTURE, CAN GENERATE CASH
FLOW, REDUCE EXPENSES, OR IMPROVE SALES, REGARDLESS OF WHETHER IT'S
MANUFACTURING EQUIPMENT OR A PATENT.
CURRENT ASSETS
• CURRENT ASSETS ARE SHORT-TERM ECONOMIC RESOURCES THAT ARE EXPECTED TO BE
CONVERTED INTO CASH WITHIN ONE YEAR. CURRENT ASSETS INCLUDE CASH AND CASH
EQUIVALENTS, ACCOUNTS RECEIVABLE, INVENTORY, AND VARIOUS PREPAID EXPENSES.
• CURRENT ASSETS ARE LISTED ON THE BALANCE SHEETS IN DESCENDING ORDER OF LIQUIDITY
AND CONSIST OF :
• CASH
• SHORT TERM INVESTMENT
• ACCOUNTS RECEIVABLE
• INVENTORIES
• PREPAID EXPENSES
FIXED ASSETS OR NON CURRENT ASSETS
• FIXED ASSETS ARE THOSE ASSETS THAT WILL NOT BE CONVERTED TO CASH WITHIN A YEAR.
• INVESTMENTS OR LONG TERM INVESTMENT
• PROPERTY, PLANT & EQUIPMENT.
LIABILITIES
• LIABILITIES REPRESENT AMOUNT OWNED TO CREDITORS. THEY ARE CLASSIFIED AS

1. CURRENT LIABILITIES
2. LONG TERM LIABILITIES
CURRENT LIABILITIES :
CURRENT LIABILITIES ARE TYPICALLY SETTLED USING CURRENT ASSETS, WHICH ARE ASSETS THAT
ARE USED UP WITHIN ONE YEAR. EXAMPLES OF CURRENT LIABILITIES INCLUDE ACCOUNTS
PAYABLE, SHORT-TERM DEBT, DIVIDENDS, AND NOTES PAYABLE AS WELL AS INCOME TAXES
OWED.
NON CURRENT LIABILITIES
• NONCURRENT LIABILITIES INCLUDE DEBENTURES, LONG-TERM LOANS, BONDS PAYABLE,
DEFERRED TAX LIABILITIES, LONG-TERM LEASE OBLIGATIONS, AND PENSION BENEFIT
OBLIGATIONS. THE PORTION OF A BOND LIABILITY THAT WILL NOT BE PAID WITHIN THE
UPCOMING YEAR IS CLASSIFIED AS A NONCURRENT LIABILITY.
EQUITY
• EQUITY IS THE OWNERSHIP OF ANY ASSET AFTER ANY LIABILITIES ASSOCIATED WITH THE
ASSET ARE CLEARED.
• EQUITY, TYPICALLY REFERRED TO AS SHAREHOLDERS' EQUITY (OR OWNERS' EQUITY FOR
PRIVATELY HELD COMPANIES), REPRESENTS THE AMOUNT OF MONEY THAT WOULD BE
RETURNED TO A COMPANY'S SHAREHOLDERS IF ALL OF THE ASSETS WERE LIQUIDATED AND
ALL OF THE COMPANY'S DEBT WAS PAID OFF IN THE CASE OF LIQUIDATION.
• FOR EXAMPLE, IF YOU OWN A CAR WORTH $25,000, BUT YOU OWE $10,000 ON THAT
VEHICLE, THE CAR REPRESENTS $15,000 EQUITY. IT IS THE VALUE OR INTEREST OF THE MOST
JUNIOR CLASS OF INVESTORS IN ASSETS.
• SHAREHOLDERS’ EQUITY=TOTAL ASSETS−TOTAL LIABILITIES