Question

You have just been hired as a new employee in Nike’s Accounting Department. Up to this point in time, most of the attention has been focused on financial accounting in this department, but the upper level executives have realized that they need to expand their managerial accounting team. You have been hired to help bring the managerial accounting branch of the Department up to speed!

First, you need to be sure that the Department and some key managers have a clear understanding of managerial accounting. Then you can turn your attention to some of the actual systems and processes.

To ensure there is a solid foundational understanding of managerial accounting, you are going to present some simple examples to the current Accounting Department employees as well as to a dozen managers who will be using managerial accounting information frequently. The worksheet below guides you through gathering materials for your presentation.

1. To emphasize key differences between financial accounting and managerial accounting, list several examples of how each type of accounting may be used by Nike (e.g., what types of reports, what type of information, etc.).

Financial Accounting within Nike:

1. _______________________________________________
2. _______________________________________________

Managerial Accounting within Nike:

3. _______________________________________________
4. _______________________________________________

2. Briefly describe how managerial accounting information might be used by Nike’s managers:

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

Answer 1

Financial Accounting within Nike: Let me point out Example and signify the way, Financial Accounting can be best used within Nike, Using Financial Accounting within Nike, We can record Various Financial Transaction and Determine Financial Position of the company, also we can determine Profit or Loss for the Organization, Financial Accounting can be concerned with Historical Data, Using GAAP technique, we can Govern Financial Accounting Again Financial Accounting can be reported as the end of the Year, and Can Published in the News letter of Nike Financial Accounting only Include Monetary Transaction and Quantitative Information, Nike prepare Financial Accounting Sheet, as to meet Legal Requirement of State and Federal government,

Managerial Accounting within Nike: Managerial Accounting can be used in the Business of Nike, include distinct Features and assist the management in decision making and policy formulation, Further use of Managerial Accounting, we can project various financial forecasting data, expected revenue generation in coming future, Unlike financial forecasting, Managerial Forecasting uses no specific principles Entire Managerial accounting can put priority for both quantitative and qualitative concepts, as well as it can include Monetary data and Non Monetary Data, so data type could also be qualitative, as such data can support Financial Decision making for the Company - Nike, It has no reporting frequency, as if needed by Management or sponsors, Managerial Accounting can be used within Nike, Managerial Accounting may not be published in News letter of the Nike Company, further such accounting are done voluntarily and that basically used to meet the requirements of the Management but not done to meet legal requirements,

Briefly describe how managerial accounting information might be used by Nike’s managers: Nike Managers can use Managerial Accounting Information in such way, such can support the company Nike competes in a fast paced and highly competitive business market, Quick decision and correct decision as well as Implementing strategy usually supported by Management Accounting, some examples like cash flow Management, sales Tactics and Budgeting can be part of Managerial Accounting, such accounting usually help Nike’s Manager to take operational decisions and help to increase the company’s operational efficiency, Nike’s Managers usually use performance reports to evaluate deviation or actual results from the budgets, Another important example that if Nike has fixed budget USD 1,000 for a week for access to various Suppliers resources and expenditure for this week is USD 1,500 USD, thus Nike’s Manager know that there is deviation between budget and actual expenditure, thus it is not a good sign, so, Managerial accounting can be used to signaling the managers to either increase their expectations on prices or they should move to another provider, who can provide supplier resources at low cost