Hospitality Accounting Chapter 4
Exam questions 2026 Exam Questions
and verified Answers
What Owners Care For on Balance Sheet - CORRECT ANSWERS Tells them the amount of the
business they actually "own".
Lien - CORRECT ANSWERS The legal right to hold another's property to satisfy a debt.
What Investors Care For on Balance Sheet - CORRECT ANSWERS To measure their ROI and
see if it can be maximized.
What Lenders Care For on Balance Sheet - CORRECT ANSWERS If the business can repay its
debt
What Creditors Care For on Balance Sheet - CORRECT ANSWERS If the business can repay
What Managers Care For on Balance Sheet - CORRECT ANSWERS What the current financial
balances are of accounts that have a direct impact on operations
More about the income statement, however
Wealth - CORRECT ANSWERS The current value of all a company's assets minus all of the
company's obligations
Three Approaches to Measuring Wealth - CORRECT ANSWERS 1. Historical approach
2. Current (replacement) value approach
3. Future value approach
, Historical Approach - CORRECT ANSWERS To value something at the price the business paid
when they bought it
Current (Replacement) Value - CORRECT ANSWERS To value at the amount of money it
would require to replace asset
Future value - CORRECT ANSWERS To value at the amount of money (income) it could earn
for shareholders in the future
Two Ways to Format Balance Sheet - CORRECT ANSWERS 1. Account Format
2. Report Format
Account Format - CORRECT ANSWERS To list the assets of a company on the left side of the
report and the liabilities and OE on the right side.
Report Format - CORRECT ANSWERS To list the assets of a company first and then the
liabilities and OE under.
Current Assets - CORRECT ANSWERS Assets that are expected to be sold or turned into cash
within one year or operating season.
Liquidity - CORRECT ANSWERS The ease in which current assets can be converted to cash in
a short period of time.
Assets are ranked from high liquidity to low liquidity
Cash - CORRECT ANSWERS The cash held in cash banks, money held in checking or savings
accounts electronic fund transfers from payment card companies, and CDs
Exam questions 2026 Exam Questions
and verified Answers
What Owners Care For on Balance Sheet - CORRECT ANSWERS Tells them the amount of the
business they actually "own".
Lien - CORRECT ANSWERS The legal right to hold another's property to satisfy a debt.
What Investors Care For on Balance Sheet - CORRECT ANSWERS To measure their ROI and
see if it can be maximized.
What Lenders Care For on Balance Sheet - CORRECT ANSWERS If the business can repay its
debt
What Creditors Care For on Balance Sheet - CORRECT ANSWERS If the business can repay
What Managers Care For on Balance Sheet - CORRECT ANSWERS What the current financial
balances are of accounts that have a direct impact on operations
More about the income statement, however
Wealth - CORRECT ANSWERS The current value of all a company's assets minus all of the
company's obligations
Three Approaches to Measuring Wealth - CORRECT ANSWERS 1. Historical approach
2. Current (replacement) value approach
3. Future value approach
, Historical Approach - CORRECT ANSWERS To value something at the price the business paid
when they bought it
Current (Replacement) Value - CORRECT ANSWERS To value at the amount of money it
would require to replace asset
Future value - CORRECT ANSWERS To value at the amount of money (income) it could earn
for shareholders in the future
Two Ways to Format Balance Sheet - CORRECT ANSWERS 1. Account Format
2. Report Format
Account Format - CORRECT ANSWERS To list the assets of a company on the left side of the
report and the liabilities and OE on the right side.
Report Format - CORRECT ANSWERS To list the assets of a company first and then the
liabilities and OE under.
Current Assets - CORRECT ANSWERS Assets that are expected to be sold or turned into cash
within one year or operating season.
Liquidity - CORRECT ANSWERS The ease in which current assets can be converted to cash in
a short period of time.
Assets are ranked from high liquidity to low liquidity
Cash - CORRECT ANSWERS The cash held in cash banks, money held in checking or savings
accounts electronic fund transfers from payment card companies, and CDs
