Deck 15: Understanding Billing and Financial Operations in the Hospitality Industry

Question 1

Split billing is a method of settling charges on a folio by which certain amounts are settled with allowances while other charges are settled with transfers.

Answer 1

False

Question 2

Guests who arrive late to claim their reservations (each hotel sets its own definition, but usually after 6:00 PM) are called late charges.

Answer 2

False

Question 3

Certain departmental charges (chiefly rooms, food, beverage and telephone sales) may be posted to folios several times each day.

Answer 3

False

Question 4

Recording frequent allowances that correct the same issue enables management to identify areas of operation that need the attention of its customer-relations program.

Question 5

Using point-of-sale terminals in the dining rooms speeds the accumulation of records but at the cost of more frequent late charges than with a pencil-and-paper voucher.

Question 6

A customer (hotel guest) who owes a business (hotel) for services that have been delivered by not paid for is know as an "account receivable."

Question 7

There is one folio for each person - not for each room - in the hotel.

Question 8

Hotels offer numerous services that increase the balance of a folio, but there are only three methods of settling (paying) for those services: cash, allowances and transfers.

Question 9

Most charges are posted at the departmental location using a POS terminal, but some charges are posted by the front office staff because every department may not have a POS terminal, even though the hotel has a Property Management System.

Question 10

Cash is the method most often used by guests to settle their folio accounts; credit cards are the next most used methods; most hotels will not accept checks.

Question 11

A strong U.S. currency aids the balance of payments because it deters U.S. citizens from going abroad to spend their money.

Question 12

Most city-ledger accounts are not actual, living persons.

Question 13

Tour-group coupons accepted by the restaurant cashier in payment for the lunches of tour members are accumulated and charged eventually on the individual folios of each guest.

Question 14

Hotel cashiers are more likely to lose money from accepting counterfeit bills than they are from being robbed.

Question 15

Debit cards have not gained in popularity because the typical user (the average hotel guest) has little or no knowledge of accounting's debits and credits.

Question 16

The city ledger came into being when Visa introduced credit cards, between 1970 and 1980.

Question 17

If sales managers must choose in order to finalize some business, they should extend credit against room sales rather than for banquet sales, which have a lower profit margin.

Question 18

To improve credit monitoring, walk-in guests are usually flagged with a code identification, including WI (walk-in) and NR (no reservation).

Question 19

Split folios (A and B folios) are the standard method of handling front-office billing for guests who "pay"for their rooms either with frequent-guest points or due bills.

Question 20

A 63-room roadside motel would most likely have no city-ledger.

Question 21

Chargebacks, charges returned to the merchant by the credit-card company, are often never collected simply because no one is assigned the task.

Question 22

Most city ledger charges enter the city ledger by way of the front office, which transfers the folio balance as the guest checks out.

Question 23

Hotels that belonging to the chain's frequent-guest program are reimbursed far less for stays by frequent-guests using their points than the actual room rate charged to those guests.

Question 24

Hotels may fail to press for collection of no-show reservations that have been guaranteed with a credit card because they fear to lose potential customers.

Question 25

Cashiers in all departments pay out funds to both guests and employees, who request cash for tips received on signed guest checks.

Question 26

Cashiers in all departments compare their actual bank counts to what they should have, which is determined by records, registers and computations, in order to compute over and short.

Question 27

Well, bucket or pit are used in reference to the cashier's file because they are usually recessed in the desk.

Question 28

There are as many city-ledger accounts as there are rooms in the hotel; it makes no difference whether or not the room is occupied.

Question 29

A three-day billing pattern is used by most hotels for speedy check outs and banquet charges because prompt billing is one key to reducing bad debts.

Question 30

Although it is an extreme measure, hotels may lock out guests and/or take their luggage if payment is not forthcoming on reasonable demand.

Question 31

Renting the ballroom and providing food and beverage to a pay-as-you-go function based on ticket sales (say, a charitable dinner/dance) is a high credit risk venture for the hotel.

Question 32

Allowances are usually granted after the fact, when management can no longer correct the situation that caused the complaint.

Question 33

Which position in the hotel would likely NOT be discussed in a chapter dealing with cash?

A) Night auditor
B) Food servers accepting tips on credit cards
C) General cashier
D) Front-office cashier
E) F & B manager

Question 34

A front-office cashier would most likely pay out cash to a guest who had:

A) A debit balance at the time of check-out
B) A credit balance at the time of check-out
C) Been a previous city-ledger account with the hotel
D) Paid for the room in advance
E) Either A or B depending on the circumstances

Question 35

Which item is NOT a member of this set?

A) Turn-in
B) Over or short
C) Cashier's report
D) Ledger
E) Due bank

Question 36

Among the countries NOT using the Euro are:

A) Austria
B) Mexico
C) Germany
D) France
E) Both A and B

Question 37

The "one-two-three steps"for detecting worthless checks are:

A) 1.Verify room number; 2. Use a "MoneyChecker;" 3. Ask manager if uncertain
B) for: 1. Perforation; 2. The Federal Reserve district number; 3. Magnetic ink on the routing code
C) Ask: 1. Is the routing code on the bottom of the check; 2. Are the check's sides smooth; 3. Is the amount in even numbers
D) 1.Collect the fee; 2. Employ cameras; 3. Ask for a fingerprint
E) The authors offer no "one-two-three steps" for detecting worthless checks

Question 38

Credit-card transactions cost the merchant/hotel which fee?

A) Interchange fee
B) Chargeback fee
C) Authorization fee
D) Discount fee
E) All of the above

Question 39

The distribution of charges between a master account and a guest's personal account is called:

A) Split folios
B) Comp allowances
C) Direct billing
D) Credit accounting
E) None of the above

Question 40

Which of the following does NOT appear on a folio:

A) Guest's credit card number
B) Number of guests in the party
C) Guest's address
D) Guest's name
E) None of the above; that is, they all appear on the folio

Question 41

An example of an asset is:

A) Beverage allowances
B) Room sales
C) Taxes collected and due to be paid to a municipal government
D) Accounts receivable due from guests
E) All of the above depending on the circumstances

Question 42

A skipper is a (an):

A) Nickname given to the hotel GM
B) Guest who leaves without paying his bill
C) Guest who charges bar drinks to the room folio
D) American-plan guest who skips one or more meals that have been prepaid
E) Both A and D

Question 43

Which of the following helps distinguish real bills from counterfeits:

A) Visible watermark
B) Color-shifting ink
C) Security thread
D) Finger printing
E) All of the above except D

Question 44

Bills are presented to guests by:

A) Total charges exceeding a ceiling established by the hotel
B) Means of the in-room television set
C) A copy delivered under the room door the night before check out
D) The front desk at the time of check out
E) All of the above, depending on the circumstances

Question 45

The "________ Fee Party,"in which restaurants boycotted American Express over excessive fees, took place in:

A) Miami
B) Philadelphia
C) Los Angeles
D) Montreal
E) Boston

Question 46

Which of the following is NOT a category of this city-ledger set?

A) Late charges
B) Travel agents
C) Banquet charges
D) Taxes payable
E) None of the above; that is, they are all city-ledger categories

Question 47

EFT is shorthand for:

A) Equal and Fair Treatment - federal requirement for treatment of employees
B) Every First Time [Guest] - part of frequent-guest programs
C) Electronic Funds Transfer - for moving money electronically
D) Each Frequent Traveler - the true reference to frequent-guest programs
E) Both B and D, the meaning gets garbled at times

Question 48

Which of the following is NOT a term used in this set of terminologies for trading room nights for advertising or for products):

A) Due bills
B) Reciprocal trade agreements
C) Trade outs
D) Trade advertising contracts
E) RNTs, room night tradings

Question 49

Room charges are posted during the day by the front-office staff if the:

A) Guest is a day-rate guest
B) Hotel is still using a pencil-and-paper folio
C) PMS lacks posting capability
D) Auditor has not completed the job the night before
E) All of the above except C

Question 50

Which of the following may alert the desk to a possible skipper:

A) Charges small items to the folio
B) Provides a credit card
C) Has a reservation
D) Has light or even worthless looking baggage
E) Both A and D

Question 51

Which of the following is NOT a city-ledger account:

A) Banquet charges
B) Bank fees for processing bad checks
C) Executive (of the hotel) accounts
D) Credit-card companies
E) None of the above; that is, they are all categories of the city ledger

Question 52

Which of the following is among the 4 most common complaints made by meeting planners about master-account billing? The:

A) Amount of tips and gratuities charged
B) Lack of servers during breakfast meetings
C) Refusal of the desk to take reservations beyond the block guarantee
D) Acceptance of unauthorized signatures on checks for services rendered
E) All of the above

Question 53

Collection agencies working to recover bad debts for a hotel:

A) Begin collecting small balances and work upward to large accounts
B) Charge a fee of between 5% - 10% of the amount collected
C) Collect most of the amounts and accounts handed to them
D) Often employ the same techniques as those tried by the hotel
E) Both A and B

Question 54

Hotels sell ________ to their guests.

A) Accommadations
B) Acommodations
C) Accomidations
D) Accommodations
E) Accomodations

Question 55

Compute how much more the cashier needs to get from the guest as the guest checks outORhow much change the cashier needs to give as the guest checks out.
GIVEN: A guest from the Land of Everywhere (LE)A folio balance of $639.00The guest has been here 3 nights9 LE's = $1.00
The guest tenders 6 each of 1,000 LE billsState sales tax is 5%The bank's rate is 8 LE's = $1.00
Cashier's give change in U.S. currency only

Question 56

Describe the difference in handling a bar bill that is to be posted to the guest's folio if:A. The bar uses a POS with a PMS at the desk.B. The bar has no POS, but there is a PMS at the desk.

Question 57

First-class hotels respond to every complaining guest with cash, comps or gifts, no matter how minor the complaint or how small the value of the settlement.

Question 58

The ethnic distribution (Caucasians, Blacks, Asians, etc.) of the lodging industry's workforce is almost identical to the ethnic distribution of the American population.

Question 59

The authors define total quality management or customer service management as an attitude that has every employee acting like a concierge and thinking like a manager.

Question 60

The best quality guarantee is a specific one that has the hotel promising a specific act to be accomplished within specific guidelines (breakfast in 12 minutes) or else (no charge).

Question 61

Angry guests can be mollified if the employee who caused the problem is disciplined or, in serious enough situations even discharged, in front of the complainer.

Question 62

Some hoteliers dislike empowering employees because it requires increased supervision and, therefore, larger, more costly organizational structures.

Question 63

Because of the possibility of disease, family pets are allowed at only hotels that have been inspected and certified by local health departments as pet-friendly.

Question 64

Apologies are free so the hotel should offer as many as needed to soften a complaint.

Question 65

Most hotels use bed linen of 300 count, although some upscale properties have gone to a 180 count.

Question 66

To be accommodated on a "no-arrivals"day, a guest must have been overnight in the hotel on the previous day.

Question 67

Personal data (age, sex, travel destination, purpose of the trip, etc.), which has been on European registration cards for many years, now (since 9-11) appears on U.S. registration cards as well.

Question 68

By posting the disclaimer of liability required by state laws, innkeepers can limit their liability for the loss of guest valuables.

Question 69

Self-check-in equipment, which accepts registrations and dispenses keys, is available in kiosks in some hotel lobbies.

Question 70

Florida has no state income taxes which helps explain why Tampa and Miami, Florida have the nation's highest room taxes.

Question 71

Heretofore hotels waited for a court order before releasing information about their guests; now - because of the anti-terrorism legislation - it can be done merely by a letter.

Question 72

Most hotels scatter tour group assignments to numerous floors throughout the hotel.

Question 73

Hotels do not enforce either time very stringently, but when they do, it is the check-out time, not the check-in time, that receives the most attention.

Question 74

Algorithms are among the newest amenity that up-to-date hotels are adding to their rooms and services.

Question 75

Only guests with light baggage, or no baggage at all, can be required to pay in advance for their accommodations.

Question 76

Recognizing the marketing and economic potential, American hotelkeepers have vigorously introduced environmental programs and lobbied for environmental legislation.

Question 77

The double room rate has always been twice the single rate; falling occupancies at the start of the new century forced management to reconsider this long-standing approach.

Question 78

Local governments that enact high lodging taxes on hotels room should expect to see a decline in tourist demand.

Question 79

Per diem room rates are established by federal, state and local governments and apply to government employees traveling on business for those political divisions.

Question 80

Published rates (printed in advertising materials) and posted rates (legally required by some state laws) must always be identical.