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    Accounting effects of product recall

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    This is the question:
    Research a company which has recently had a product recalled. Explain the purpose of the recall and the accounting effects.
    I went to:
    http://www.recalls.gov/recent.html
    and chose:
    US Consumer Product Safety Commission - Recent Recalls and Product Safety News
    Byer California Recalls Girls' Jackets with Drawstrings Due to Strangulation Hazard...
    http://www.cpsc.gov/cpscpub/prerel/prhtml10/10161.html

    Please help me with what the accounting effects would be. Thank you.

    © BrainMass Inc. brainmass.com June 3, 2020, 11:51 pm ad1c9bdddf
    https://brainmass.com/business/accounting/accounting-effects-product-recall-303028

    Solution Preview

    When a product recall is done, it is not taken as a sale reversal. The sales have been made earlier. A product recall is treated as an expense and a liability created.
    A product recall ...

    Solution Summary

    The solution explains the accounting effects of a product recall

    $2.19

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