Question 1

What is the name of the activity that describes the recording and summarizing of a business's financial data?

Accepted Answer

Bookkeeping is the activity that involves the recording and summarizing of a business's financial transactions, which is essential for maintaining accurate financial records.

Question 2

What is the primary purpose of a uniform system of accounts?

Accepted Answer

The primary purpose of a uniform system of accounts is to present financial data in a useful and consistent manner, allowing for comparability and standardization across businesses or within sectors.

Question 3

What is the financial information that is listed first on a P&L prepared using the USAR?

Accepted Answer

Sales are typically listed first on a Profit and Loss statement (P&L) prepared using the Uniform System of Accounts for Restaurants (USAR), as they represent the starting point for calculating net income by subtracting costs and expenses.

Question 4

What is the financial information that is listed last on a P&L prepared using the USAR?

Accepted Answer

Profits are listed last on a Profit and Loss statement (P&L) prepared using the Uniform System of Accounts for Restaurants (USAR), as it summarizes the financial performance after accounting for all revenues, costs, and expenses.

Question 5

The two expenses that are included in the Prime Costs section of a P&L prepared using the USAR are food and

Accepted Answer

Prime costs in a P&L statement using the USAR (Uniform System of Accounts for Restaurants) include food and labor expenses.

Question 6

Under what expense category is "Depreciation" listed when a P&L is prepared using the USAR?

Accepted Answer

Depreciation is listed under "Non-controllable Expense" in a Profit & Loss statement prepared using the Uniform System of Accounts for the Lodging Industry (USAR) because it is a fixed cost that cannot be easily altered by management.

Question 7

In what section of a P&L prepared using the USAR are an operation's occupancy costs recorded?

Accepted Answer

Occupancy costs are recorded under non-controllable expenses in a P&L prepared using the USAR (Uniform System of Accounts for Restaurants) because they are fixed costs that cannot be easily altered by management.

Question 8

Last month a manager's operation achieved $60,000 in food sales and $40,000 in beverage sales. The manager's cost of sales for food was $15,000 and cost of sales for beverages was $8,000. What was the manager's cost of sales percentage for food last month?

Accepted Answer

The cost of sales percentage for food is calculated by dividing the cost of sales for food by the total food sales and then multiplying by 100. So, $15,000 / $60,000 * 100 = 25%.

Question 9

What is the formula managers use to calculate a sales variance percentage?

Accepted Answer

The correct formula to calculate a sales variance percentage is to subtract the last period's sales from this period's sales, then divide by last period's sales. This measures the percentage change in sales from one period to the next.

Question 10

In the last accounting period, an operation achieved total sales of $120,000. The operation's manager then budgeted a 4.5 percent sales increase for the next accounting period. What will be the manager's budgeted sales amount for the next accounting period?

Accepted Answer

The budgeted sales amount for the next accounting period is calculated by increasing the total sales of $120,000 by 4.5 percent. This is done by multiplying $120,000 by 1.045 (100% + 4.5% = 104.5% or 1.045 in decimal form), which equals $125,400.

Question 11

An operation had sales this period of $89,775. Last period sales were $85,500. What was the operation's percentage sales increase for this period when compared to last period?

Accepted Answer

The sales increase is calculated as (Current Sales - Previous Sales) / Previous Sales * 100. So, the increase is (($89,775 - $85,500) / $85,500) * 100 = 5.0%.

Question 12

Last month an operation generated $100,000 in food sales and $40,000 in beverage sales. The operation had a cost of sales for food of $35,000. What was the operation's food cost percentage last month?

Accepted Answer

The food cost percentage is calculated by dividing the cost of food sales by the total food sales and then multiplying by 100. So, $35,000 / $100,000 * 100 = 35%.

Question 13

"Total sales - Total cost of sales" is the formula a manager uses to calculate an operation's

Accepted Answer

Gross profit is calculated by subtracting the total cost of sales from the total sales. This metric shows the profit a company makes after deducting the costs associated with making and selling its products or services.

Question 14

An operation had a beginning beverage inventory of $15,000 for an accounting period and an ending beverage inventory of $19,000 for the period. What was the operation's average beverage inventory value for the period?

Accepted Answer

The average beverage inventory value is calculated by adding the beginning inventory ($15,000) and the ending inventory ($19,000) and then dividing by 2. This results in an average inventory value of $17,000.

Question 15

For what food category should inventory turnover in a food service operation be highest?

Accepted Answer

Baked goods typically have a shorter shelf life compared to dried, frozen, or canned foods, necessitating a higher inventory turnover to ensure freshness and reduce waste.

Question 16

Last year an operation had a cost of food consumed for meats of $310,000. In that year the operation had a beginning meat inventory of $15,000 and ending meat inventory of $16,000. What was the operation's inventory turnover for meat last year?

Accepted Answer

The answer of Last year an operation had a cost...

Question 17

Last month an operation generated $200,000 in food sales and $50,000 in beverage sales. The operation had a cost of sales for beverages of $10,000. What was the operation's beverage cost percentage last month?

Accepted Answer

The beverage cost percentage is calculated by dividing the cost of sales for beverages by the total beverage sales, then multiplying by 100. So, $10,000 / $50,000 * 100 = 20%.

Question 18

When an operation increases it sales, its cost of variable labor

Accepted Answer

When sales increase, variable labor cost will increase because more labor is required to produce more units. However, variable labor cost percentage will remain unchanged because variable labor cost increases at the same rate as sales.

Question 19

When an operation increases it sales, its cost of fixed labor

Accepted Answer

Fixed labor costs remain constant regardless of the level of production or sales. Therefore, when sales increase, the total fixed labor cost stays the same, but it represents a smaller percentage of the total sales, indicating that the fixed labor cost percentage decreases.

Question 20

A manager calculates labor cost percentages for both fixed and variable labor costs. If there are no staff pay raises, and the manager's sales increase by five percent, the fixed labor cost percentage should

Accepted Answer

Fixed labor costs are constant regardless of the level of output or sales. Therefore, if sales increase, the proportion of sales that fixed labor costs represent will decrease, because the same amount of labor cost is spread over a larger amount of sales. Variable labor costs change in direct proportion to the level of output or sales. However, if there are no staff pay raises, the rate at which variable labor costs increase will be consistent with the rate of sales increase, keeping the variable labor cost percentage unchanged.

Quiz 9: Analyzing Results Using the Income Statement