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• Accounting


  An information system that identifies, records, and communicates the economic events of an organization to interested users
• Branches of Accounting


  • Financial Accounting
  • Cost Accounting
  • Tax Accounting
  • Auditing
  • Managerial Accounting
• Accounting Process


  1. Identify - select financial transactions

  2. Record - classify and summarize

  3. Communicate - Prepare financial reports, analyze, and interpret them
• Financial Accounting


  Branch of accounting that focuses on recording, summarizing, and reporting financial transactions
• Elements of Financial Accounting

  • Revenue/Income (Kita) - money taken in (gross income figure)
  • Expense (Gastos) - the cost of everything required to operate the business
  • Profit (Tubo) - what remains after all expenses have been paid
  • Assets (Pag-aari) - items owned by the business
  • Liabilities (Utang) - amounts the business owes
  • Owner's Equity (Capital) - the difference between assets and liabilities is equal to the claim that owners have on the assets
• Cost Accounting


  Classifying, recording, and reporting business expenses
• Tax Accounting


  Deals with the accurate and timely filling of tax forms, payments, and documents required by the government
• Auditing


  Branch of accounting concerned with the truthfulness and accuracy of financial reports. The purpose is to point out weaknesses and/or irregularities and to prevent accounting fraud
• Managerial Accounting


  Branch of accounting where transactions are recorded and analyzed for the purpose of making management decisions
• Uniform System of Accounts


  An agreed-upon system of accounting for a particular segment of the industry. A way for accounting and financial professionals to report the financial activities of a foodservice industry
• Accounting Formula


  Assets = Liabilities + Equity. This forms the foundation of the balance sheet and the income statement
• Financial Record


  A comprehensive management information system that links up with other functions that influence the financial well-being of the foodservice operation
• Records for Control


  • Purchasing and Receiving Records
  • Storage and Storeroom Records
  • Food Production
  • Service Records
• Purchasing and Receiving Records


  • Purchase orders
  • Invoices
  • Receiving records
  • Requisitions
  • Discrepancy reports
• Storage and Storeroom Records

  • Requisition or storeroom issue records
  • Perpetual Inventory
  • Physical Inventory
• Food Production


  • Menu
  • Standardized recipes
  • Portion control standards
  • Production schedule and leftovers report
  • Forecast and tallies
• Service Records


  Documents used to collect and tract actual demand for eating occasions and individual menu items

  
• Income and Expense Records

  • A record of daily transactions is essential for preparation of monthly financial statements
• Sales and Cash Receipts

  • Business procedures are needed for accounting of cash received in foodservice operations. These produce summary print-outs and proofs of cash collected
• Income Statement


  A summary of financial information for a defined accounting period. Used to evaluate the effectiveness of the manager, the investment of investors/creditors, extend credit, and the effectiveness and ability to run a profitable operation
• Gross profit


  Income (sales) - cost of food sold
• Net profit or loss

  Gross profit - labor and operating costs
• Balance sheet


  A listing of assets, liabilities, and capital of an operation as of a specific date
• Balance sheet elements


  • Current assets - cash and other assets that will be converted to cash
  • Fixed assets - permanent
  • Current liabilities - those that must be paid monthly/bi-annually/yearly
  • Long-term liabilities - those that will not be paid within the coming year
• Ratio Analysis


  Used to evaluate a number of issues with an entity, such as its liquidity, efficiency of operations, and profitability
• Ratio Analysis Categories


  • Liquidity - is the organization able to pay its bills when they are due?
  • Solvency - is the organization able to meet is long-term financial obligations?
  • Activity - how effectively is the organization using its assets?
  • Profitability - how effective is management in generating sales, controlling expenses, and providing a profit?
  • Operating - how successful is the organization in generating revenues and in controlling expenses?
• Ratio Analysis Metrics


  • Food Inventory Turnover = Cost of Food sold/Average Food Inventory
  • Profit Margin = Net Profit/Sales
  • Return on Equity = Net Profit/Equity
  • Return on Assets = Net Profit/Total Assets
  • Average Customer Check = Total Sales/Number of Guests Served
  • Seat Turnover = Covers Served/Number of Seats
  • Food cost % = Cost of Food Sold/Food Sales
  • Labor cost % = Cost of Labor (Salaries, Wages, Benefits)/Total Sales
  • Beverage cost % = Cost of Beverages Sold/Beverage Sales
  • Labor minutes per meal = Minutes of Labor Time to Produce Meals/Number of Meals Served
• Pricing Factors

  • Local competition
  • Level of service
  • Type of customer
  • Product quality
  • Portion sizes
  • Ambiance
  • Meal period
  • Location
  • Sales mix
  • Food and labor costs
  • Desired profit margin
• Conventional Pricing: Recipe Costing based on Food Cost Percentage

  1. Compute for the Total Raw Food Cost (TRFC)

  2. Get for the Hidden Loss [10%] (HL)

  3. Calculate the Mark Up Factor

  4. Calculate the Selling Price