Manufacturing
Provision for Product Recall
Estimating and recording the cost of a future product recall based on a known defect.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Product Recall Expense | Expense (+) | 25,000.00 | - |
| Provision for Recalls | Liability (+) | - | 25,000.00 |
💡 Accountant's Note
Following the Prudence principle, if you know a batch is bad, you must record the estimated cost of retrieving and fixing it immediately.
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