Week 4 EOC: Chapter 4, Quiz Question 3

Answers:

a. The chains % for cash is 6.70%. Rachel's cash % is lower with 4.5%. "the term cash refers to the cash held in cash banks, money held in checking or savings accounts, or electronic fund transfers from payment card companies." (Pg. 123, Managerial Accounting for the Hospitality Industry.) Which means that the cash she has available compared the chains is lower.

b. Rachel's Inventories % of 2.7% was higher than the Chains Inventories %. "inventories will include the value of the food, beverages, and supplies used by a restaurant, as well as sheets, towels, and the in-room replacement items, used by a hotel." (Pg. 124, Managerial Accounting for the Hospitality Industry) Which just means Rachel's Inventories have a value greater than the chains.

c. Rachel's % in Accounts Payable is higher with 11.3% compared to the chains 10.50%. "Accounts payable represents money that you owe to your suppliers for products or services that you have received." (Pg. 151, Managerial Accounting for the Hospitality Industry) Therefore, Rachel owes more money than the chain does.

d. Rachel's 2.5% in Notes Payables is higher than the Chains %. Which means Rachel borrowed more money this year than the Chain did.