ACCOUNTING IN THE HOSPITALITY INDUSTRY A CASE STUDY OF SAVANNAH SUITE LIMITED, ABUJA

By

ARUM IFEYINWA KATHY

Presented To

Department of Accounting

ABSTRACT

To the topic, we know that hotels industry are those industries that render rooms and meals services to various peoples in affordable price.

The outcome of this study is to highlight the value of accounting department in the hospitality industry (Hotels). The purposes of this course is to educated the operators of the industry D. how to channel accounting for the smooth running of the management.

Through accounting scope, they can dictate if the operation areas are in trouble and know how to rectify the problems.

Fro the purposes of this study, I will adopt the primary and secondary methods of collecting data.

TABLE OF CONTENTS

COVER PAGE

TITLE PAGE

APPROVAL PAGE

DEDICATION

ACKNOWLEDGMENT

ABSTRACT

TABLE OF CONTENTS.

CHAPTER ONE:

1.1 INTRODUCTION

1.2 STATEMENT OF RESEARCH PROBLEMS

1.3 OBJECTIVE OF THE STUDY

1.4 SIGNIFICANCE OF THE STUDY

1.5 SCOPE OF THE STUDY

1.6 LIMITATION OF THE STUDY

1.7 STATEMENT OF HYPOTHESIS

1.8 DEFINITION OF TERMS

CHAPTER TWO

2.1 LITERATURE REVIEW

2.2 HISTORICAL DEVELOPMENT OF ACCOUNTING

2.3 DEFINITION OF ACCOUNTING

2.4 CLASSES AND TYPES OF ACCOUNTING

2.5 ACCOUNTING

2.6 ACCOUNTING AS PART OF INTERNAL CONTROL

2.7 THE ROLE, RELATIONSHIP OF THE ACCOUNT

2.8 ACCOUNTING PROCEDURE IN HOTELS

2.9 THE ACCOUNTIGN DIVISION OF SAVANNAH SUITE LIMITED

2.10 DEVELOPMENT IN ACCOUNTING PROCEDURES.

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 RESEARCH METHODOLOGY

3.2 DATA COLLECTION METHOD

3.3 RESEARCH DESIGN

3.4 JUSTIFICATION FOR INSTRUMENT USED

3.5 METHODS OF DATA ANALYSIS

CHAPTER FOUR

4.1 DATA PRESENTATION

4.2 ANALYSIS OF DATA

4.3 TEST OF HYPOTHESIS USING CHI-SQUARE

CHAPTER FIVE

5.1 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.2 SUMMARY OF FINDINGS

5.3 CONCLUSION

5.4 RECOMMENDATION

BIBLIOGRAPHY

APPENDIX: QUESTIONNAIRE

CHAPTER ONE

11 INTRODUCTION OF THE STUDY

Many people think of accounting as a highly technical field, which can be understood only by professional accountants Actually, nearly every pone practices accounting in one form or another on an almost daily basis In Quote, American Accounting Association (1999: p5) Define Accounting is the art of system of measuring the results of business activities, communicating and interpreting financial activities

Whether one is preparing a household budget, balancing one's check book, preparing one's income tax return or running general motors one is working with accounting concepts and accounting information

Another definition by Vickery, BG (1973: P15) principle s and practice of Book-keeping and Accounts Accounting has often been called the language of business, as well as a language of communication in an organization, it is logical that a language should change to meet to changing needs of society In accounting, the changes and improvements are continually being made We live in an era of accountability Although accounting has made it's most dramatic progress in the field of business, the accounting function is vital to every unit of out society An individual must account for his or her income, and must file income tax returns Often an individual must supply personal accounting information in order to buy a car or home To qualify for a college scholarship, to secure a credit card, o to obtain a bank loan Large corporations are accountable to their stockholders, to governmental agencies and to the public The federal government, the states, the cities, the school district, al must use accounting as a basis for controlling their resources and measuring their accomplishments Accounting is equally essential to the successful operation of a business, a university, a fraternity, a social program, or city

In every electric the voters must make decision at the ballot box on issues involving accounting concepts; therefore, some knowledge of accounting is needed by all citizens if they are to act intelligent in meeting the challenges of our society The knowledge of accounting and the ability to use accounting information aid in making economic and political decision

At this point, I will like to introduce the history of business hotels limited

Benue hotels was built as a result of the completion of the Makurdi rail way/road Bridge opened on the twenty fourth (24^th) May, 1932 It came into existence is the early seventy and was then known as a great house This guesthouse then used by top government officials, colonial masters during state tours and officials visits The bridge brought in a lot of visitors into Makurdi town, as the town was the first to have had such a long and attractive bridge This also gave rise to accommodation demand in Benue State, hence the sprigging up of other hotels like the Makurdi Plaza Hotel, Bem Hotel, and also the government started the uncompleted 300-bed room international hotel (Sheraton Hotel)

The Makurdi guesthouse than turned to its present name Benue Hotels limited 1986 when Nigeria is was divided up into nineteen states

The Benue State Government owns 75% shares in Benue Hotels limited while the Nigerian hotels owns 24 shares The Benue hotels limited is managed by the Nigerian Hotels; with their head quarters situated in Lagos

BENUE HOTELS LIMITED

ORGANIZATIONAL STRUCTURE

 
12 STATEMENT OF RESEARCH PROBLEMS

Accounting to Osuala (1982: 26) Problem definition is the most important part of a research and a statement of a problem verves elaborate upon the information implied in the title of the research

One of the greatest challenges facing the Hotels industry today, is the increasing incidence of lack of proper accountability It has in recent constituting serious problems to hotels in Nigeria, this lack of proper accountability have led to the failure and subsequently closure of a great number of hotels in Nigeria

With the frequent cause of lack of proper accountability in the hotel industry today, one would began to ask questions Thus the questions, which prompted the researcher's inquisitive mind to carry out this study, are as follows:

i What are the contributions of accounting department to the development of the hotel?

ii What are the procedures that are followed in carrying out accounting functions in hotels?

iii What role does accounting department play as part of internal control?

iv What are the problems facing accounting department

v Is accounting department effective?

13 OBJECTIVES OF THE STUDY

The study is undertaken to throw more light on accounting procedures and problems encountered in hotels

The study is intended o take the researcher to the study and understanding the modern accounting theory and practice as well as examine the disparity and relationship between the work of an accountant in the hotel industry and other industry The study is intended to investigate and bring out the relative importance of accounting in hotels examines the function of accounting department in hotels

The study is also aim at analyzing the causes of problems encountered in carrying out accounting functions or activities in hotels and also recommend possible solutions

14 SIGNIFICANCE OF THE STUDY

The study is of significance to hotels with accounting department or division so that through this research they can appreciate the relevance of the accounting department o management efficiency This they can recognize it scope of operations and areas where there are problems and of course to make effort to rectify the problems The research work can even be of more particular importance to the management of savannah suite limited Hotels limited This can also serve as an information to the following groups of people:

- Student

- business community

- Researcher

- Investors

- Managers

15 SCOPE OF THE STUDY

In studying the accounting in the hotel industry, emphasis was led on the accounting department or division of Savannah suite limited The financial data collected and used in the course of this research work covers the period between 2000-2001

16 LIMITATION OF THE STUDY

The study was carried out under a number of limitations; the time available was grossly in adequate to carry out the research in details the researcher had tried to concentrated on areas considered very important

The researcher's visit to the school library did not prove too useful since most of the text books on accounting in particularly has little or nothing to offer as regards the accounting in the hotels industry In an attempt by the researcher to get other write ups on accounting in the hotels industry from accounting firms proved abortive

Finance of course was yet another constraint on this study The researcher had problems of running around because of financial constraints cause by inflating trend in fuel prices every day

Finally, hotel officials were reluctant to make data available because most of the data required were considered delicate and only meant for the sole use of the hotel

However, the above limitation does not in any way affect the validity of the data used in this study

17 STATEMENT OF HYPOTHESIS

A statistical hypothesis can be defined as "an assumption or statement which may or may not be true concerning one or more population"

(HAWKINGS; 1973; 53) It is a tentative statement about reality that can either be supported or reduced on the basis of collected evidence or relevant information The above boils down to the fact that statement of hypothesis becomes only accepted evidence

This study seeks to examine the following hypothesis that:

1 Ho: The success of Savannah suite limited is independent of the activities of the accounting department

Ho: The success of Savannah suite limited is independent of the activities on the accounting department

2 Ho: The performance of savannah suite limited on the accounting department is independent of technical support

H1: The performance of savannah suite limited on the accounting department is independent of technical support

3 Ho: The measurement of profitability and efficiency is independent of the activities of accounting department

H1: The measurement of profitability and efficiency is independent of the activities of accounting department

18 DEFINITION OF TERMS

Here are the meanings of some technical terms that was used:

i RECORDING: This the recording of financial transaction, events and situations effecting the unit

ii ANALYZING: This concerns the procedures of separating transaction into parts

iii CLASSIFYING: This involved the categorization of revenues and expenditure into accounts groups according to pre-determined classification code

iv SUMMARIZING: This involved the gathering of transaction data into sub-total and totals in accordance with relevant reporting units of the same classification This may be done daily, monthly, quartile or annually as the management may specify

v COMMUNICATION: This is the transportation of the outcome of the option on the financial data of a business or government to intended and interested users

vi INTERPRETING: This involves the explanation of the report on the activities and performance of the business or government units which may have been produced in professional or technical Jargons

vii TRANSACTION: This means business activities: such as sales of goods, purchases of goods, payments and receipts of money, the incurring of an expense etc

viii BALANCE SHEET: A statement which presents information about the financial position of an organization at a given point in time

ix ASSETS: The resources which an individuals or organization owns

CURRENT ASSETS: These are resources acquires for long lasting use rather than for resale at a profit

INTANGIBLE ASSETS: These are assets that do not exist physically, (eg good will), but which contribute substantively to the survival of an organization which owns them

x CAPITAL: The excess of total assets over total liabilities, funds provides by and belonging to the owners of the business

xi TURNOVER: This refers to the net, sales, that is the value of goods sold loss returns 9if any) It may also be refers to as gross earnings

xii DEPRECIATION: Is the part of the cost of the fixed asset consumed during it's period of use by the firm

xiii LIABILITY: Something owed by he business (In its boarder definition, liabilities include owner's capital)

xiv CCREDITOR: A person or organization to whom the business owns money

xv DEBTOR: A person or organization owning money to the business

xvi WSORKING CAPITAL: The excess of current assets over current liabilities