Accounting for revenue at crowne plaza west hanoi hotel residence

TABLE OF CONTENT TABLE OF CONTENT ACKNOWLEDGEMENT STATUTORY DECLARATION ABBREVIATION LIST OF FIGURE CHAPTER 1: INTRODUCTION 1.1 Rationale 1.2 Research Objectives 1.3 Research Methodology 1.3.1 Method of collecting data 1.3.2 Data analyzing method .3 1.4 Scope of research .3 1.5 Research Structure .3 CHAPTER 2: THEORETICAL BASIS OF REVENUE ACCOUNTING 2.1 Overview of Revenue 2.1.1 Definition of Revenue 2.1.2 Objectives of Revenue 2.1.3 Revenue classification 2.1.4 Accountants’ responsibility for Revenue 2.2 Accounting for Revenue under International Accounting Standards 2.2.1 Revenue recognition under International Accounting Standards .6 2.2.2 Revenue Control under International Accounting Standards .9 2.3 Accounting for Revenue under Vietnamese Accounting Standards 10 2.3.1 Revenue recognition under Vietnamese Accounting Standards .10 2.3.2 Revenue Control under Vietnamese Accounting Standards .14 CHAPTER 3: CHARACTERISTICS OF REVENUE ACCOUTNING WITHIN A HOTEL 16 3.1 Operational characteristics of a hotel .16 3.1.1 Functions and duties of a hotel 16 3.1.2 Operational characteristics of a hotel .16 3.2 Characteristics of revenue at a hotel 17 3.2.1 Accommodation Service 17 3.2.2 Food & Beverage Service 18 3.2.3 Aditional services .18 CHAPTER 4: REVENUE ACCOUNTING AT CROWNE PLAZA WEST HANOI HOTEL & RESIDENCE 22 4.1 Overview of Crowne Plaza West Hanoi Hotel & Residence 22 4.1.1 General information of Crowne Plaza West Hanoi Hotel & Residence 22 4.1.2 Establishment and development process of Crowne Plaza West Hanoi Hotel & Residence 22 4.2 Overview of Accounting Department and Organization chart among departments related to Revenue 22 4.2.1.Organization chart of Accounting Department 22 4.2.2.Organization and relation among departments related to Revenue 27 4.3 Cycle of recording and controlling revenue at Crowne Plaza West Hanoi Hotel & Residence 28 4.3.1.Overview of Revenue at Crowne Plaza West Hanoi Hotel & Residence 28 4.3.2.Food & beverage revenue recognition and controlling process 33 4.3.3 Accommodation revenue recognition and control process .43 CHAPTER 5: DISCUSSION AND RECOMMENDATION ABOUT REVENUE ACCOUNTING OF CROWNE PLAZA WEST HANOI HOTEL & RESIDENCE .61 5.1 Strength of Revenue Control of Crowne Plaza West Hanoi Hotel & Residence 61 5.2.Weakness of Revenue Control of Crowne Plaza West Hanoi Hotel & Residence 62 5.3.Recommendation for Revenue Control Accounting at Crowne Plaza West Hanoi Hotel & Residence 62 CHAPTER 6: CONCLUSION 65 ACKNOWLEDGEMENT Firstly, I would like to thank to the Center for Advanced Educational Programs for their efforts of supporting students to have great internship opportunities and complete this internship program Secondly, I express my gratefulness to my supervisor: Dr Le Kim Ngoc Her valuable advice, broad knowledge and careful instruction strongly support me to carry out my internship Thirdly, I give my sincere thanks to the Crowne Plaza West Hanoi Hotel, especially Mr Tu Duc Hoang, the income supervisor at the accounting department of Crowne Plaza West Hanoi Hotel His enthusiastic support and useful information help me a lot in fulfilling this task Finally, I desire to express my gratitude to all lecturers at National Economics University Their lessons, guidance and experience are great packages for me in my way up the career ladder STATUTORY DECLARATION I herewith formally declare that I myself have written the submitted Barchelor Thesis independently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper I clearly marked and separately listed all the literature and all other sources which Iemployed producing this academic work, either literally or in content Hanoi, 12/06/ 2017 Signature Nguyen Thu Thao ABBREVIATION AR Account Receivable AP Account Payable CPWH&R Crowne Plaza West Hanoi Hotel & Residence CM Credit Manager F&B Food and Beverage GL General Ledger Officer MF Manager of Finance LIST OF FIGURE Figure 2.1: Revenue audit objectives .15 Figure 4.1 Organization chart of Accounting Department 23 Figure 4.2 Department Relation in Recording Revenue 27 Figure 4.3 Cycle of Recording revenue on system 29 Figure 4.4 Price set up process 34 Figure 4.5 Banquet Revenue Control process 38 Figure 4.6 Open check test process 41 Figure 4.7 Accommodation Revenue Recognition process 43 Figure 4.8 Accommodation rate setup process .45 Figure 4.9 Profoma invoice control process 54 CHAPTER 1: INTRODUCTION 1.1 Rationale Tourism is a "non-smoke" industry that brings great benefits not only to the local but also to the nation Tourism not only brings economic benefits but also brings social and cultural benefits In recent years, along with the development of international tourism, tourism has become a key economic sector of many countries Vietnam is also a country with tourism economy development Our country is considered to be the safest and friendliest destination in the world, which is an advantage in contributing to boost the development of Vietnam's tourism industry Hanoi City is highly appreciate as one of the most famous tourist cities of Vietnam With cultural heritage and many sightseeings, Hanoi is not only the capital of Vietnam but also a place with full of amazing things to explore Therefore, tourism has brought to this city a significant source of revenue Especially, every years, Hanoi organizes many festivals They are great opportunities for tourism businesses in the city to promote their image and attract tourists to their businesses Parallel with the increase in international and domestic visitors, hotel construction and business explode Hotel system in Hanoi increased quickly and the top concern of all these businesses is profit Profit directly affects the existence and development of the business Especially in the process of international economic integration and especially when Vietnam has joined WTO, becoming the 150th member of this organization, business efficiency is a matter of top concern of companies and enterprises To find out if the business is profitable, it is necessary to ask accountants to analyze the revenue and determine the business results Turnover is the total value of economic benefits that an enterprise derives from the results of its business activities contributing to the increase in equity The higher the sale is, the faster the growth of the business get Revenue must be sufficient to offset the cost and profit to continue to reproduce Thus, revenue settlement and defining business performance in an organization play very important roles Accounting for revenue analysis and business performance is one of the key components of business accounting for the fastest and most reliable economic information, especially when the economy is on the fast track In the fierce competition period, every business has made full use of its existing capabilities to increase profits to expand its market share Seeing the meaning and importance of revenue accounting and business results in current business of Vietnam, along with the knowledge gained during school time with the time I practice at the Crowne Plaza West Hanoi Hotel & Residence and decided to Supervisor: Dr Le Kim Ngoc Nguyen Thu Thao – AA55B take the subject of "Accounting for Revenue at Crowne Plaza West Hanoi Hotel & Residence" to be the subject of my thesis 1.2 Research Objectives There are three main objectives of my research The first objective is to describe the current situation of accounting for revenue in Crowne Plaza West Hanoi Hotel & Residence Especially, operating activities of Crowne Plaza West Hanoi Hotel & Residence related to many types of revenue Therefore, the accounting for revenue is essential for the operation of the firm The second objective is pointing out some problems at accounting for revenue of Crowne Plaza West Hanoi Hotel & Residence After a period of working as an intern at CPWH&R, I realized that the revenue accounting system here had some disadvantages which may cause limitations of human resource and quality management and even give chances to the loss of revenue Consequently, the third objective of this research is giving some recommendations to solve problems as well as improve the effectiveness of the accounting for revenue at CPWH&R 1.3 Research Methodology 1.3.1 Method of collecting data Data collected comprises of primary information and secondary information Primary data is obtained through survey and observation In the meantime, secondary data is picked up from firm’s books, vouchers, and other related sources of information To illustrate more, data is collected by following ways: Inquiry: It provides personal opinions and assessments about the situation of accounting process by interviewing accountants, director and other staffs at Crowne Plaza West Hanoi Hotel & Residence The purpose of those interviews is to deliver a subjective view refers to the accuracy of the information attained during the research period Observation: In my internship period, I purposefully pay attention to the operation system of the firm, especially in accounting department, for example, observing the task assignments of accountants Thereby, I can understand the characteristic, process of company and accounting for revenue in actual circumstances In obtaining secondary data for extensive knowledge about accounting on revenue framework and real situation at the hotel, I acquired data from various sources of data as following: Supervisor: Dr Le Kim Ngoc Nguyen Thu Thao – AA55B - Vietnamese Accounting Standards - Crowne Plaza West Hanoi Hotel & Residence’s accounting documents, journals, books, reports, and financial statements in the year 2016 - Accounting websites and forums 1.3.2 Data analyzing method Comparing technique: During this study, the comparing technique is applied in paralleling accounting models with condition in actual, linking with the involving books to recognize similarities and dissimilarities Mathematical technique: This technique is utilized to compute the revenue, the balance situation and other related requirements … with the purpose of obtaining the correct accounting figure for examining the accuracy of data collected 1.4 Scope of research The study concentrates on the accounting for Revenue and the current situation of accounting for Revenue at Crowne Plaza West Hanoi Hotel & Residence - Space range: Crowne Plaza West Hanoi Hotel & Residence - Time range: in the year 2016 In spite of efforts during the period, the report has some inevitable limitations because of my shortage in practice experience, knowledge and restriction of time Based on the theory of accounting for revenue and the current practice at Crowne Plaza West Hanoi Hotel & Residence accompanied by its strengths and limitations, I have suggested some recommendations with hope that they would be beneficial for the improvement of the company 1.5 Research Structure - Chap 1: Introduction - Chap 2: Theoretical basis of Revenue Accounting - Chap 3: Characteristics of Revenue Accounting within a Hotel - Chap 4: Current situation of Revenue Accounting at Crowne Plaza West Hanoi Hotel & Residence - Chap 5: Discussion and Recommendation Supervisor: Dr Le Kim Ngoc Nguyen Thu Thao – AA55B CHAPTER 2: THEORETICAL BASIS OF REVENUE ACCOUNTING 2.1 Overview of Revenue 2.1.1 Definition of Revenue The income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expenses are deducted Revenue is shown usually as the top item in an income (profit and loss) statement from which all charges, costs, and expenses are subtracted to arrive at net income Also called sales, or (in the UK) turnover Turnover is an important indicator because the turnover is the basis for determination of the tax payable to the National budget, which is used to offset the business capital and expenses incurred in the course of operation of the enterprise, Corporate profits are also determined from sales Sales target refers to the business situation of the business, thereby orienting the development of business in the future In addition, revenue is a factor that confirms the existence and development of enterprises in the marketplace Therefore, the analysis to find out the cause of the increase or decrease in turnover in the business period is very important According to International Accounting Standards, revenue is the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants According to Vietnamese Accounting Standards, revenue is measured at the fair value of the consideration received or receivable Revenue is determined by the straightforward value of the amounts collected or to be collected after deducting trade discounts, rebates on sales and value of returned goods 2.1.2 Objectives of Revenue Sales revenue is an important financial source to help businesses cover expenses in the course of production and business activities, thus contributing to the continuation of their business processes Consuming goods or consuming slow will lead to financial stress If the enterprise makes full and timely sales, it will speed up the flow of working capital, create favorable conditions for enterprises to organize capital, reduce the capital mobilized from the party Also, it will reduce the cost of capital Supervisor: Dr Le Kim Ngoc Nguyen Thu Thao – AA55B ... AT CROWNE PLAZA WEST HANOI HOTEL & RESIDENCE 22 4.1 Overview of Crowne Plaza West Hanoi Hotel & Residence 22 4.1.1 General information of Crowne Plaza West Hanoi Hotel & Residence. .. current situation of accounting for revenue in Crowne Plaza West Hanoi Hotel & Residence Especially, operating activities of Crowne Plaza West Hanoi Hotel & Residence related to many types of revenue. .. 5.2.Weakness of Revenue Control of Crowne Plaza West Hanoi Hotel & Residence 62 5.3.Recommendation for Revenue Control Accounting at Crowne Plaza West Hanoi Hotel & Residence