Main topic of this final paper is conducted as research approach to specificity of accounting in the hospitality industry. Base of research is theoretical as well as practical examination of the mentioned topic. Theoretical part shows legal framework of enterprises operating in hospitality branch of Republic of Croatia, under Accounting and Hospitality Laws and regulations. While the Hospitality Law defines categorization of hospitality objects as well as regulations concerning its minimum requirements for starting a business, Accounting Law is applied with following of the accounting principles and standards. In Republic of Croatia, IFRS (International Financial Reporting Standards) were introduced in the year 2006. and are mandatory applicable in financial reporting of all large enterprises, while small and medium-sized enterprises are also allowed to report under HSFI (cro. Hrvatski standardi financijskog izvještavanja). Apart from that, Law of Fiscalization is discussed and applied to all companies operating with cash payments, hospitality industry being one of the most characteristic ones since the nature of their business and “pay after service” principle. Theoretical part of thesis additionally observes accounting from the point of enterprise form as well as the accounting system that are base for determination of developing financial statements. According to the legal formation of a company, enterprises differ between two most common forms in hospitality industry-craftsman and limited liability company. Based on their legal formation, craftsman are obligated to report using basic bookkeeping records while the limited liability companies account on the principle of double-entry bookkeeping. Specificities of accounting in the hospitality industry arise from the nature of the business. Paper explains the reasons behind high amounts of inventory in the balance sheets of catering objects at the end of the business year as well as stock taking process, low accounts receivables in balance sheet with emphasis on particular exceptions, use of normatives, specifics in payroll accounting and VAT treatment along with the specificity of application of Consumption Tax on particular beverages. Practical examination is brought with an overview of the financial records of the company “AERO D.N.S. d.o.o.” formed as a restaurant. Being formed as a limited liability company, its financial reports mandatory include the Balance Sheet and the Income Statement. Based on the analysis of current items in the Balance Sheet, conclusion stands that Current Assets and the Current Liabilities account for the largest proportion of Total in both, proving theoretical part of thesis that liquid items are highly present in hospitality industry. On the example of account receivables, thesis discusses differences between accounting of VAT and Consumption Tax treatment of certain items listed on the bills. While VAT is applied on all items on the receipt in the amount of 25%, Consumption Tax is additionally added to VAT in the amount of 2% (prescribed and regulated by local municipality) and applied by the Law on particular alcoholic and non-alcoholic drinks and beverages. Both of tax liabilities are reported and payed to Tax Administration at the end of the each month as VAT form and PP-MI-PO form for Consumption Tax. Analysis of the Income Statement distinguishes relations of Profit with Operating and Financial income or loss and supports claim that Profit is not a reliable indicator of business profitability. Based on the records data of “AERO D.N.S. d.o.o.” company is showing positive financial result i.e. Profit and negative Operating result i.e. loss, meaning that restaurant is not successful in conducting its core business, but rather that Profit is realised from the side financial activities of the company i.e. Financial income that is covering for Operational loss.