1.

Explain and describe the books and business forms needed when starting a small
hotel.
The main books needed when operating a small hospitality business are:
A ledger
A cash book
A journal
A petty cash book

Additional books the business might use are:
A wage book
A stock book

The ledger is a book containing all the accounts of the company. All the assets and liabilities of the
business except for the bank and cash in hand transactions are there. Retailers may have one
official ledger but keep separate accounts in separate ledgers for convenience. For example a small
or big retailer may keep books for customer accounts, creditors accounts and impersonal accounts.
The entries from the extra ledger and the cash book are very carefully transferred to a single ledger.
The ledger should contain both personal and impersonal accounts. As impersonal accounts should
be considered the fixed asset accounts (ex vehicles, equipment etc), the revenue accounts, the
expense accounts (purchases, wages, heating etc) and miscellaneous accounts (capital or drawings
etc).
The cash book has entries of all cash transactions taking place whether it is money in or out of the
account. The cash book usually is kept in accordance to the companys bank statements and need
to be balanced regularly for example once a week but can be done more regularly if need be.
A journal is what we call a book of original entry, which means that it is used to capture transactions
as they happen, be it a check written, a sale collected or a purchase made. Whatever happens, there
is an accounting journal for it. It is possible for small businesses to operate without one and simply
post entries to the ledger by transferring them from ledger accounts but it is risky as it has a large
margin of error. A journal entry must have a date, details explaining what this entry is about , journal
voucher number and a credit and debit columns.
A petty cash book is one in which all small payments made through petty cash fund are recorded
systematically. The book is very important for small businesses as it supplies information regarding
petty payments made on different people more easily and quickly. It also saves time as each
payment under a particular person is not posted into the ledger separately and helps to make the
main cash book more informative, clean and clear by including only major transactions.
Finally there are a few other books a business might decide to keep but a small business will have a
wages and salary book and a stock book. As a wave we mean payment for labor or services to a
worker, especially remuneration on an hourly, daily or weekly basis or by the piece. A stock book is
a list of all the assets the company has including a variety of things from bed linen and kitchen
utensils to buildings and vehicles. It is good to keep track of that so as to know how often you need
to replenish your stocks and how much it would cost.
2. Explain the purpose of the cash book in accounting. Rule up a cash book for the
Miranda Hotel and enter the following transactions for the first two weeks in
May. After you have completed this, post the entries to the appropriate
accounts.
MIRANDA HOTEL
May
1 Balance of cash brought forward from April 2.000
2 Paid Business Rate 100
3 Made cash sales of 500
Bought new table linen - 150
4 Received 400 from I Adams for use of conference facilities
5 Paid electricity bill - 500
6 Made cash sales - 450
7 Paid Airy Dairy 150 for milk deliveries in April
8 Purchased goods for cash valued - 250
9 Received 300 from Jones ltd for use of banqueting room
10 Made cash sales of - 80
11 Bought petrol for hotel minibus - 25
12 Paid Poultry Supplies Ltd 280 for goods purchased in April
13 Paid salaries - 500
A cash book is a journal in which all cash receipts and payments (including bank deposits and
withdrawals) are recorded first in chronological order for posting to general ledger. A cash book is
regularly reconciled with the bank statements as an interval auditing measure. It needs to have cash
disbursement entries for all cash payments (such as accounts payable etc) and cash receipts entries
in which all cash receipts such as cash, sales etc are recorded.
Miranda Hotel
Cash Book Journal
Date Particulars Dr Cr Balance
01-May (b/d) Balance 2,000.00
02-May Business Rate 100.00 1,900.00
03-May Cash Sales 500.00 2,400.00
new table linen 150.00 2,250.00
04-May I Adams 400.00 2,650.00
05-May electricity bill 500.00 2,150.00
06-May Cash Sales 450.00 2,600.00
07-May Airy Dairy 150.00 2,450.00
08-May Purchased goods 250.00 2,200.00
09-May Jones ltd 300.00 2,500.00
10-May Cash Sales 80.00 2,580.00
11-May petrol for hotel minibus 25.00 2,555.00
12-May Poultry Supplies Ltd 280.00 2,275.00
13-May salaries 500.00 1,775.00


1,730.00 1,955.00
Balance 1,775.00

3. From the figures given, draw up the Petty Cash Book, enter the items and
balance showing the brought forward.
Opening float - 30.00 (as 1
st
April)
Paid out bus fare - 4.00
Paid out postage - 1.70
Paid out cash - 10.00 (owner for himself)
Paid out light bulbs - 1.40
Paid out envelopes - 2.50
Paid out flowers - 6.50
Miranda Hotel
Petty Cash Book Journal
Date Particulars Float Payments Transportation Postage Expenses Misc
04/01/2013 Float 30.00
Bus fare 4.00 4.00
Postage 1.70 1.70
Cash 10.00 10.00
Light bulbs 1.40 1.40
Envelopes 2.50 2.50
Flowers 6.50 6.50
Total Spent 26.10 4.00 4.20 1.40 16.50
Cash left 3.90
30.00

05/01/2013 Balance 3.90
Reimburses 26.10
Float 30.00



4. What is a Bank Reconciliation Statement and use an example to illustrate its
purpose.
A book reconciliation statement is a calculation comparing the cash book balance with the bank
statement balance.
Sometimes the bank statement and the cash book dont agree. That is not unusual because the
bank does not action the entries at the time the businessman enters to his cash book but at the
time that they actually happen. So a check might exist as an entry at the cash book but it will
appear at the statement when it is presented to the bank for payment.
Supposing Mr. Williams has received two checks as payment for services rendered at the amount
of 150.00 by Jones and 200.00 by Smith and he has also signed a check to settle the account
that he has with Super Cleaners ltd at the amount of 100.00. In order to make his book agree he
has to reconcile them.

DR CR
Balance per bank statement 500.00
Checks not yet presented Super Cleaners ltd 100.00
100.00
400.00
Checks not yet cashed
Smith 200.00
Jones 150.00
Balance per cash book 750.00

Debit Credit
Balance in hand as per bank 500.00 Payment not in the bank 100.00
Additional amount 350.00 Balance in hand per cash book 750.00
850.00 850.00